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Inventory with zero value

In this blog I would like to show a way of how to keep inventory of the same product in a site, but parts of the inventory have zero value. There might be different use case for that, e.g.

  • Some quantities need to be scrapped, but I still want to see the quantity on stock
  • Inventory is not owned by me, but in my site

The idea is as follows: inventory valuation can be done either on business residence (site) or on product specification level. Since I want to keep valued and non-valued stock in the same site I will use a product specification instead, to model the zero-valued stock. However since product specification usage always means identified stock (iStock) management (…) I will use the ‘Option Specified Stock’ setting in the product master. By this I am not forced to manage iStock in my normal transactions but only in case I want to manage the zero-valued stock.

In the following you find a step-by-step explanation of how to set this up:

  1. Set the ‘Identified stock type of the product to ‘Optional specified Stock’
  2. Set the valuation level type of the product to ‘Product Specification’
  3. Maintain the standard inventory costs for the product. In this example I set the costs to 20 USD.
  4. Create the product specification master data in the product development work center to reflect the ‘zero value’ part of the product. You do not need to assign this product specification to a product. By this you can reuse the product specification for multiple different products. Release the product specification, so that it can be used in the processes.
  5. In the valuation tab of the product master there is a button called ‘Maintain Product Specification Valuation’. Press the button and add a line with zero value for the corresponding product specification. You have to do this for every business residence, where you want to store zero-value inventory.
  6. Create an iStock master record in the ‘Warehouse and Logistics Master Data’ work center for the product referencing to the product specification. I recommend to name the iStock the same as the product specification.
  7. Now do some inventory postings with and without reference to the iStock. As a result in the valuated stock overview (Physical Inventory work center) you see two lines for the product, one with a value and one without a value.

Have fun,


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  • HI, Stefan:

    If my case is the same with below, how can I set up? thank you.

    • Some quantities need to be scrapped, but I still want to see the quantity on stock
    • Inventory is not owned by me, but in my site
    • Hi Mola Wu,

      scrapping can also be done. The scrapping common task support the identified stock. You need to ensure that the correct istock, belonging to the zero value stock, is then selected.

      Best regards,


  • Hello Stefan,

    I have followed all the steps mentioned here in your post, but when I am trying to get inventory into the system via inbound delivery. I am getting the error "The identified stock must not be assigned to a product specification." every time I am trying to select iStock ID on the line item. Not sure what am I doing wrong. If I remove the product specification from iStock and post the inventory system is not showing zero cost on the valuated stock overview.

    Plus will the cost of total inventory get changed or the zero cost inventory will not impact the valuated inventory in the system?



    • Hi Ramdutt,

      it looks like you have not ordered a product with product specification. Can you please check three things:

      1. What is the identified stock type in the material master for the product you want to do the inbound delivery? It should be 'Optional specified iStock'
      2. What is the product specification value for the product in the inbound delivery item?
      3. What is the value of the product specification in the iStock that you want to use in the inbound?

      For 2. and 3. the product specification value must be the same.

      If this does not help please create an incident.

      Best regards,


      • Hi Stefan,


        1. Identified Stock type maintained as Optional Specified Stock.
        2. I have created product specification as ZERO_VALUE_INV and maintained it for the material with zero cost, also created an iStock ZERO_VAL_INV (I have also tried with exactly same names and as you could create istock with the same id I had to create another one) and linked both iStock and Product specification.

        after that, I have created a PO for the same material. There is no product specification on the PO line item, now when I am creating the inbound delivery for the same PO and selecting the iStock on the line system is throwing the error  “The identified stock must not be assigned to a product specification.”

        For one of the item, I also tried with removing the product specification from the iStock but in that case, stock value is not coming out to be zero.