12. INVENTORIES Group 2023 2022 RM’000 RM’000 At cost/net realisable value Raw materials 3,042 8,790 Finished goods 57,979 55,995 61,021 64,785 Recognised in profit or loss: Inventories recognised as cost of sales 28,331 29,594 Write down of inventories 3,037 3,450 Cost of inventories is determined using the first-in first-out and weighted average method and are stated at lower of cost and net realisable value. The Group writes down its obsolete or slow-moving inventories based on assessment of their product lifecycle and nature. Inventories are written down when events or changes in circumstances indicate that the carrying amounts could not be recovered. Management specifically analyses sales trend when making this judgement to evaluate the adequacy of the write down for obsolete or slow-moving inventories. Where expectations differ from the original estimates, the differences would impact the carrying amount of inventories. 13. RIGHT TO RECOVER RETURNED GOODS/(REFUND LIABILITIES) Group 2023 2022 RM’000 RM’000 Right to recover returned goods 1,603 2,190 Refund liabilities (2,897) (4,266) An asset with a right to recover returned goods and the corresponding refund liabilities are recognised in relation to finished goods sold with a right of return. These are measured by reference to the former carrying amounts of the sold inventories less any expected costs to recover those inventories and any potential decreases in the value to the Group of the returned inventories. 14. CONTRACT WITH CUSTOMERS (a) Contract costs Group 2023 2022 RM’000 RM’000 Cost to obtain a contract 104 253 Cost to obtain a contract primarily comprises commission fees paid to intermediaries as a result of obtaining contracts and they are recoverable. Capitalised commission fees are amortised when the related revenues are recognised. During the current financial year, the amount of amortisation was RM1,011,000 (2022: RM1,924,000). ANNUAL REPORT 2023 SASBADI HOLDINGS BERHAD 112 Financial Statements (continued)
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