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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Impact when STD costs ...
Finance | Project Operations, Human Resources, ...
Suggested answer

Impact when STD costs are changed mid-period

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Posted on by Heather Steinhauser 85

Hello,

I have a question re: changing std costs, and the assumption is there was no inventory of this item prior to the scenario:

Item A is purchased/received with a STD cost of $10/ea

The STD is changed to $15/ea

The items are sold after the STD changed to $15/ea

Will that difference fall into an inventory variance account in D365FO?

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  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Impact when STD costs are changed mid-period

    Hi Heather,

    I don't know what you call 'inventory variance account'.

    What will happen is at the time you increase the price from $10 to $15 a posting will be made that increases your inventory value by (15-5) = 5 x quantity.

    If your inventory variance account is a P&L account then you get richer.

    If your inventory variance account is a BS account then there is no profit effect and you see a pure BS transaction only.

    The posting made will debit your stock and credit a inventory revaluation account that can either be setup as P&L or alternatively as BS account.

    Best regards,

    Ludwig

  • Suggested answer
    Junaid Idrees Profile Picture
    Junaid Idrees on at
    RE: Impact when STD costs are changed mid-period

    Hi Heather Steinhauser,

    If you are using a costing version to base the standard cost calculation and create new costing version for $15 then variance will be posted to "Inventory cost revaluation"

  • Suggested answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 299,024 Super User 2025 Season 2 on at
    RE: Impact when STD costs are changed mid-period

    Hi Heather,

    When you activate the new cost version with the new cost price, the variance will be posted to the "Inventory cost revaluation" account.

    When you sell the goods after the change, the new cost will be used for the inventory deduction and cost of goods sold.

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