Dynamics 365 Finance
Category
May 13, 2024
Published date
Text
Article Type
AI Summary
- The article discusses the different inventory valuation models in Dynamics 365 Finance and Operations (D365FO) or AX.
- The author explains the basic calculations behind each inventory valuation model, which are found in the Item model groups.
- The calculations are related to determining the correct cost of goods sold (COGS) for inventory issues and the impact on the remaining inventory value.
- The article provides examples and screenshots to illustrate the calculations for each inventory model, including FIFO, LIFO, LIFO date, weighted average, weighted average date, standard costing, moving average, and non-valuated.
- For FIFO and LIFO, the running average cost price is used during the month, but after running the inventory closing, the FIFO or LIFO principle is applied to determine the cost amounts of the inventory issues.
- Weighted average and weighted average date calculate the average valuation price of the total month, with the latter calculating multiple weighted averages for each inventory issue date.
- Standard costing uses a fixed valuation price entered on the item, and any difference between the standard cost price and the actual costs is posted as a profit or loss.
- Moving average calculates an average cost price after each transaction, and the available moving average cost price is used as the cost price of the inventory issue. The non-valuated inventory model is related to the Warehouse Management Only mode feature, where no inventory value is calculated for transactions in a dedicated legal entity for warehouse management processes.
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