A) There are two types of flow that are function of the materials: 1) For the industrial supplies: The program edits a proposition of the stock depreciation, based on a search notion of the last effective issue date of the stock. 2) The other materials: Primary goods, merchandises, half-finished products and end products, packaging. The system proceeds in three phases to execute the proposition of the depreciation: a) Calculate depreciation based on the coverage rate, b) Calculate depreciation based on the market price, c) Edit a proposition that uses those 2 calculations.
B) There are 2 types of Inventory Impairment: 1) Rotation Depreciation : Calculation of a percentage of impairment based on a) Last consumption date or last “first acquisition” date for industrial supplies, b) Monthly average consumption on the analysis period for other materials, Only if: Range of coverage > 0. Percentage of inventory value at Material Price (MP)
2) Financial Depreciation: It is based on the Market Value or Net Realizable Value (NRV_S) of the last 12 months. Calculation based on COPA:
Only used for finished products (Z150) and trading goods (Z130). Only if: Net Realizable Value (NRV_S) < Material Price “end of period of reference” (MP). Financial Impairment = (MP – NRV_S) x Inventory Quantity.
Calculation of Provisions for Inventory Impairment Financial depreciation = 0
Rotation depreciation = 0
Rotation depreciation > Financial depreciation
Rotation depreciation < Financial depreciation
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