Part 2-Inventory IEM industries, Inc. and Subsidiaries accounting policy for inventories is as follows: E. INVENTORY VALUATION Inventories are stated at the lower of cost or market. For a portion of the Company's inventory, cost is determined using the last-in, first-out ("LIFO") method. For approximately 36% and 47% of the Company's inventories at September 30, 2013 and 2012, respectively, the LIFO method is used to value the Company's inventories. The first-in, first-out ("FIFO") method is used to value the remainder of the Company's inventories. LIFO reserve was $7,977 and $9,537 in fiscal 2013 and 2012, respectively. During fiscal 2013, a reduction in total inventory resulted in a liquidation of LIFO inventory quantities valued at the lower costs of prior years. The LIFO liquidation decreased the cost of goods sold in fiscal 2013 by approximately $1,300. Below is a footnote extracted from their 2013 10-K filing (in thousands): 2. Inventories Inventories at September 30 consist of: Raw materials and suppli