Inventories |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Inventories Inventories were comprised of the following:
Inventories are stated at the lower of cost or net realizable value and are primarily measured on a first-in-first-out basis. The Company records valuation adjustments to the carrying value of its inventories based on periodic reviews of slow-moving, obsolete and excess inventory to determine the need for reserves by comparing inventory carrying values with their net realizable values upon ultimate sale or disposal. The Company’s estimates of net realizable value are based on historical experience as well as Management’s judgments with respect to future market conditions. In the period the Company determines a reserve is required, the Company recognizes a charge to cost of sales for the excess of the carrying value over net realizable value. The inventory reserve was $0.8 million and $0.9 million at April 30, 2024 and July 31, 2023, respectively. The Company capitalizes into inventories depreciation related to property and equipment used in the production of inventory. For the three months ended April 30, 2024 and 2023, the amount capitalized was $6.8 million and $4.9 million, respectively, and $16.8 million and $13.5 million for the nine months ended April 30, 2024 and 2023, respectively. The Company also capitalizes total lease costs related to leases used in the production of inventory. The amount capitalized was $1.1 million and $1.2 million for the three months ended April 30, 2024 and 2023, respectively. For the nine months ended April 30, 2024 and 2023, the amount capitalized was $3.4 million. In connection with the Sonoma-Cutrer acquisition, we acquired inventory of approximately $61.4 million on April 30, 2024. See Note 4 (Business Combination) for additional information.
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