How does Dynamics Ax perform the inventory settlement for closing process

Table 1 show the details of issues and receipts transaction until the inventory closing process.



Table 2.1 & 2.2 depicts how the cost prices being updated into the system after the closing inventory process in which taking the average cost price from the inventory.




Table 3.1 & 3.2 depicts cost price coming from the inventory settlement accordance with the issues and receipts.



How does system perform the inventory settlement?
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Settlement for SO1
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The below screenshot depicts the SO1 settlements details, there is no adjustment occurred during inventory closing. This is due to no cost variation to settle the issue against receipt. This issue directly gets the receipt from PO1.Please refer to table 3.1 for how the system calculates the inventory closing.




Settlement for SO2
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Click on Updates tab at item transaction screen to view the physical, financial and settlement details. It will show you the physically, financially inventory updates and adjustment has been made after the inventory closing process. The highlighted value is the invoice updated amount.




Inventory value for financially updated, for example the invoice updating amount. While issue invoice, the cost price is derived from average price from inventory that is:

PO1 remain 99 qty, $5, total: $495
PO2 remain 100 qty, $8, total: $800
Item cost price: ($495 + $800)/(99 + 100) = $6.5075
Issuing amount : ordered qty 105 * $6.5075 = $683.2875

Notice that there is an adjustment RM140.29 for SO2 happened while item consumption that matching issues with receipts after the inventory closing. Please refer to table 2.2 & table 3.2 for further details. (The issues amount RM683.29 – item consumption resulting from inventory closing RM543 = RM140.29)


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