annual_report_2019_en

126 Huawei Investment & Holding Co., Ltd.

As at December 31, 2019, deductible temporary differences amounting to CNY134,955 million (2018: CNY71,559

million) have not been recognised as deferred tax assets; additionally, unused tax credits relating to overseas

withholding income tax and research and development expenditure totalling CNY3,099 million (2018: CNY1,402

million) have not been recognised as tax assets.

20 Inventories and other contract costs

(CNY million) 2019 2018

Inventories

Raw materials 58,520 35,448

Manufacturing work in progress 27,103 17, 0 65

Finished goods 52,241 26,308

Dispatched goods and contract work in progress 20,527 11, 3 97

Other inventories 6,970 4,283

165,361 94,501

Other contract costs 2,029 2,044

167, 39 0 96,545

As at December 31, 2019 and 2018, the Group did not hold any inventories pledged as collateral for liabilities or

contingent liabilities.

(a) Amount of inventories recognised as an expense and included in profit or loss:

(CNY million) 2019 2018

Carrying amount of inventories sold 456,577 375,606

Write-down of inventories 3,796 5

460,373 375,611

For the year ended December 31, 2019, the Group wrote down certain raw materials and manufacturing work in

progress that may not be capable of being used in production as a result of the Event disclosed in note 5(c). The

write-down is included in Cost of sales.

(b) Contract costs

The Group’s contract costs represent contract fulfilment costs, which will be charged to Cost of sales when the

corresponding contract revenue is recognised.

No provision for impairment was required on contract costs as at December 31, 2019 (2018: nil).

21 Contract assets

(CNY million) 2019 2018

Gross carrying amount 53,389 48,693

Less: loss allowances (note 22(b)) (377) (417)

53,012 48,276

Non-current portion 2,200 601

Current portion 50,812 47,6 75

53,012 48,276