Responsibility area: Calculate and post Inventory Reserve
Status colour Blue title Step 1
Start the transaction ZFI_INVENTORY_SMOG
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Inventory SMOG report: initial screen |
Status colour Blue title Step 2
- Select variant
variant: /SMOG_TEMPLATE Enter Enter the company code
Key date: Last day of the month before quarterly
- Material type: ZMAT and ZVER
- The materials with null stock should not be considered in the calculation. The field must to be flagged. Note: The new materials can be excluded by flagging the field "Exclude material created after" - it is not mandatory, it will depends of the business.
- Variant layout: /SMOG_TP
Status colour Blue title Step 3
- Click on "Valuation level"
- Select "Company code"
and enter
Note: The rate of coverage is calculated at company code level and not batch level -The reason is that in some plants we only have the transfer of stock between 2 locations and no sale or consumption, which means that these plants always have 100% depreciation.
Status colour Blue title Step 4
Click on 
- Check “Tax Price 1” (where the range of coverage is stored) and “Tax Price 2” (where the Net realizable value is stored)
Check “0=0” Level 1
Click on
Add “Stock Value” to the already selected values.
The calculation of impairment will be based on the lowest of the 3 values
- Stock value (=standard)- Value Level 1 (= Tax Price 1)- Value Level 2 (= Tax Price 2)
and enter if you have a message you can click on
Then start the calculation by clicking on Ignore the warning message
Status colour Blue title Step 5
Click on 
Enter:
- “Upper limit” = “key date”
- “Lower limit” = “Upper Limit” – 12 months
The range of dates corresponds to the period of analysis of the monthly stocks
Status colour Blue title Step 6
Click on 
Enter Select and enter the range of date in the first range as the analysis period for the determination of consumptions.Select the
Then execute the transaction
The option “Determine consumption via user exit” ca be selected to apply
the rulesthe rules to calculate the range of coverage (average consumption).
Then
execute the transactionstart the calculation by clicking on 
Ignore the warning message
Status colour Blue title Step 7
SMOG Report Functions
1.The total stock are summarized by the batch stock, non batch stock and stock in transit.
2. Reserves and Financial depreciation
- Fin.Depr: value is calculated from ZWFA21A stored in field tax price 2 in material master data
- ROC(M): value is calculated from MRN1 stored in field tax price 1 in material master data
- %Reserve:
If ROC<12, then %Reserve = 0
If ROC>12 & ROC<24, then %Reserve = 0.5
If ROC>24 & ROC<36, then %Reserve = 0.75
If ROC>36, then %Reserve = 1
- Financial Depreciation: based on Solvay standard : If source price is ‘COPA’ and Market price < Total value, then Financial depreciation = Total value - Market price
- Coverage: (Stock qty * % Reserve)* Standard material price
- Blocked Qty: (Off spec material) material batch with blocked status then total batch stock is blocked (100% provision).
- Blocked Amt: Blocked Qty * Standard Material Price
- Aged Qty: (Obsolescence material) When the lower remaining days day until expiration is less than 0, the whole batch stock will be aged (100% provision).
- Aged Amt: Aged Qty * Standard Material Price
- NetCover: Coverage - blocked amt - aged amt - blocked amt adj
- FinReserve: NetCover + blocked amt + aged amt + blocked amt adj
- Good: Total value - Financial Reserve
IMPORTANT
The program ZFI_INVENTORY_SMOG will prioritize the 3 following rules:
1.Identify any blocking stock of the batch
If yes, it will be proposed to be 100% reserved
2.Identify the aging of the stock/batch based on Expiration Date
If date expired, it will be proposed to be 100% reserved
3.Identify the Range of Coverage (RoC) based on the last 12 months of consumption ( average consumption / average stock)
Reserved proposed based on following ranges
If ROC<12, then %Reserve = 0
If ROC>12 & ROC<24, then %Reserve = 0.5
If ROC>24 & ROC<36, then %Reserve = 0.75
if ROC>36, then %Reserve = 1, so for cases where ROC is equal or ≈ 9.999,00, it means that there is no consume for a long time
Note: If stock status is blocked or expired → Depreciation is 100%.
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