Letter of credit consumptions
A letter of credit (L/C) consumption is a part of the amount of a letter of credit that is reserved for a document or document line.
An initial consumption is made when a document or document line is linked to the letter of credit. The initial consumption amount is the ordered amount of the linked document or document line.
For export or domestic sales letters of credit, final consumptions are made when a shipment or shipment line related to a document linked to the letter of credit is confirmed. For import or domestic purchase letters of credit, this occurs when a receipt or receipt line related to a document linked to the letter of credit is confirmed.
Therefore, if a letter of credit is linked to various documents or document lines and some of these documents are related to confirmed shipment or receipt lines, both initial and final consumptions are present for the letter of credit.