FIFO costing in Microsoft Dynamics 365 Finance and Operations one version

In this blog, would elaborate FIFO costing / valuation in Microsoft Dynamics 365 Finance and Operations one version.

FIFO inventory costing technique in simple terms is based on ‘First In First Out’ i.e. the first receipt is to be settled with the first issue transaction.

The example uses an opening inventory (Quantity = 1 and Value =100$)

Below is an example showcasing the date of transaction and it's type (receipt/issue) and the running weighted average cost price until the inventory is revalued or closed to be assessed by the costing model.

• The financial cost amount is posted when the transaction is financially updated (viz. Purchase order is invoiced)
• Cost price using the costing model (FIFO) is like a virtual placeholder to post the adjustment between the running weighted average cost price and FIFO costing.

Good read: https://docs.microsoft.com/en-us/dynamics365/unified-operations/supply-chain/cost-management/fifo-physical-value-marking

Happy D365FO