3796092 - Understanding the Aging Increment Logic in Credit-Risk-Based Impairment – SAP S/4HANA Cloud Public Edition

• How to Determine Aging Increment and PD (Probability of Default) for Risk Classes in Credit-Risk-Based Impairment Analysis?
• No Aging Increment or Zero PD (Probability of Default) 0.0000% Determined

SAP S/4HANA Cloud Public Edition

Aging increments are interpreted as distinct intervals; if a given interval is not maintained for that risk class, the system assigns no increment and PD (Probability of Default) 0.0000%. 

In other words, for each relevant risk class, maintain a PD rate for every applicable aging increment interval in the aging variant (for example, all intervals such as not due and each overdue bucket). Do not rely on a single increment to cover a wider range; each interval must have an explicit PD for that risk class.

For example, The following setting in Define Rules for Impairment >  Configuration Activity ID 105452:
Valuation Rule SCRI
Valuation Rule Step10
Aging          IMPAIRMENT

Assign Probability of default to aging increment

When Post Credit-Risk-Based Impairment with a Key Date of 08.30.2026, the aging IMPAIRMENT actually means:

For an open item from A customer with Risk Class A,  and a Net Due Date of 08.16.2026, the item should correspond to aging increment I30 (Overdue >30 Days, Risk Class A, PD% 30%) 

However, for an open item from B Customer with Risk Class B, and the same Net Due Date 08.16.2026, due to no increment is defined for Risk Class B, the rate would be zero. 

 To resolve this issue, ensure a rate is defined for increment I30 for risk class B:

• Refer to: Assign Risk Class in Business Partner Master Data
• Refer to: KBA 3219648 - How to post Credit-Risk-Based Impairment

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