Following prerequisite required for Amortization.

Create Condition type to maintain amortization amount for material and vendor combination.
Materials Management -> Purchasing -> Conditions -> Define Price Determination Process -> Define Condition
Types.

One more condition type should be creating to maintain VAT amount.

Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Tax on Sales/Purchases -> Basic
Settings -> Check Calculation Procedure -> Define Condition Type.

Amortization:Suppose tool supply to vendor for making product, and since cost of the tool is very high, so we cannot take whole
amount of tool in one shot from supplier, instead of that tool amount recover from supplier by installment.
Every time when material receives from supplier, the installment of tool cost will be deducted from material amount.
Ex.
The amount payable for a vendor towards the supply of raw materials is Rs 100, but instead of pay him 100, I will pay
him 90 Rs and deduct the 10 Rs as installment of tool.
But In this case, even we paying him 90, we have to pay excise on 100. So we call as 10 Rs as an amortization cost of
tool.
Here VAT should be calculating on 90 Rs and not on 100 Rs.
i.e. 90 + Excise amount on (100 Rs) = VAT.
Maintain ZASS condition type in Pricing Schema (Pricing procedure) as a statically and sub-total should be 4
So amount of this condition type will add in BASB basic amount (Condition Type) of Tax procedure.

New VAT related condition type should be maintained in Tax Procedure. Base Type keeps 363. So VAT will
calculate on basic price + Excise on (Basic + Amortization cost) and not on BASB price (Basic + Amortization cost) +
Excise on (Basic + Amortization cost).

New tax code should be maintained with new VAT condition type (JVRA) and remaining regular excise condition
type.
Tax Code EG = 12% BED + 2% ECS + 1% SCESS + 5% VAT

Condition record maintenance for ZASS Amortization condition Type.

JVRA (VAT condition type ) maintained for Tax code EG.

Tax code selection screen.

GRN against above PO.

Financial Document of MIGO

J1iex Document.

MIRO .

Financial Document of