Amortization Process

Issue – Currently there is no provision in system to handle Amortization case. Excise % has to be

changed every time the basic cost changes.

Sample Calculation has been shown below:

Actual Calculation (To be in SAP)

Case 1) If CST has to be calculated without reducing Amortization cost.

Qty Total

Basic Price 218.63 10 2186.30

Amortization Cost 6.3 10 63.00

BED 12% 269.92

Ecess 3% 8.10

CST 2% 50.55

Sum 2577.86

Less Amortization Cost 63.00

Total Payable to Vendor 2514.86

Case 2) If CST has to be calculated after deducting Amortization cost. The calculation will be as follows:

No. of

meter to be

Amortized

C

Amortization

/Part

(in Rs.)

D=B/C

Assessable

Value

( in Rs.)

E=A+D

Excise

Duty

@12%

F=E*.12

Sap Excise %

to be Entered in

JMOP

G=F/A

1 100 333/Y6531 Door Seal 218.63 315,000 50,000 6.30 224.93 26.99 12.346%

PART NO.

Part

Price

( in Rs.)

(A)

Tooling

Cost Paid

( in Rs.)

(B)

S.

NO.PART NAME

Calculation for SAP & Amortization Value

Line

No.

Qty Total

Basic Price 218.63 10 2186.30

Amortization Cost (ZAM1) 6.3 10 63.00

BED 12% 269.92

Ecess 3% 8.10

Total Incl Excise 2527.31

Less Amortization cost -63.00

Total for CST 2464.31

CST 2% 49.29

2513.60Total Payable to Vendor

Amortization Process

Process in SAP

Creation of two new condition types in taxation

a. ZAM1 - +ve Amortization Cost. This is the amortization cost which will get added to the

basic cost and excise will be calculated on the same.

b. ZAM2 - -ve Amortization Cost. This is the amount which has to be deducted from the

total amount after applying Excise and before applying sales tax (CST/VAT).

There might be a case where Amortization is not deducted after calculating Excise Duty, in that case

ZAM2 might not be maintained.

These conditions have to be maintained using FV11 t-code

Note - Amortization amount will not be added in either Inventory or Excise. It will only be used in

calculating the taxes

Sample Postings in Quality Client.

Basic Price in SA – 218.63

Amortization Process

Tax conditions – Amortization Value – 6.30 per Qty. BED – 12%, Ecess – 3% , CST – 2%

Amortization Process

MIGO:

Amortization Process

Accounting Entries in MIGO

Amortization Process

J1Iex

Amortization Process

Amortization Process

MIRO

Amortization Process

Amortization Process

Amortization Process

Accounting Entries for MIRO

Total Payable amount as per Invoice Verification – 2514. 87