Presented below are excerpts from the 2015 annual report of Daimler AG, a German company that manufactures luxury automobiles. 18. Inventories

Inventories are comprised as shown in table E.41. 

The amount of write-down of inventories to net realizable value recognized as expense in cost of sales was €501 million in 2015 (2014: €391 million). Inventories that are expected to be recovered or settled after more than twelve months amounted to €930 million at December 31, 2015 (2014: €977 million) and are primarily spare parts.

Based on the requirement to provide collateral for certain vested employee benefits in Germany, the value of company cars included in inventories at Daimler AG in an amount of €718 million at December 31, 2015 (2014: €609 million) was pledged as collateral to the Daimler Pension Trust e.V. In addition, inventories with a carrying amount of €235 million at December 31, 2015 (2014: €262 million) were pledged as collateral for liabilities from ABS transactions (see also Note 24).

The carrying amount of inventories recognized during the period by taking possession of collateral held as security amounted to €103 million at December 31, 2015 (2014: €91 million). Those assets are utilized in the context of the normal business cycle.

E.41

Inventories

Required:

Using the Daimler note, identify the similarities and differences between U.S. GAAP and IFRS regarding inventory accounting

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December 31 2015 In millions of euros) Raw materials and manufacturing supplies Work in process Finished goods, parts and products held for resale Advance payments to suppliers 2014 $ 2,409 15,412 $20.864 2,643 3,371 17,609 2,936 137 107 $23,760