4 Inventories

The carrying amount of inventories increased by EUR 0.2 billion compared to December 31, 2020 to EUR 2.9 billion, primarily due to increased stockpiling of high-priced handsets for planned marketing campaigns in the United States operating segment. Exchange rate effects, in particular from the translation of U.S. dollars into euros, also contributed to the increase. A decrease in inventories in the Group Development operating segment, primarily as a result of the reclassification of T‑Mobile Netherlands’ assets to non-current assets and disposal groups held for sale in connection with the agreed sale, had an offsetting effect. Write-downs of EUR 23 million (2020: EUR 42 million, 2019: EUR 20 million) on the net realizable value were recognized in profit or loss in 2021. The carrying amount of inventories expensed during the reporting period was EUR 22,532 million (2020: EUR 16,693 million, 2019: EUR 14,340 million).

For further information on the agreed sale of T‑Mobile Netherlands, please refer to the section “Changes in the composition of the Group and other transactions” under “Summary of accounting policies.”

Finished goods and merchandise primarily comprise retail products (e.g., terminal equipment and accessories) not manufactured by Deutsche Telekom and services rendered but not yet invoiced, primarily to business customers.