Microsoft Dynamics AX (Archived)

Financial Closing and Inventory Closing

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Hi,

Can anyone please advise on the following questions regarding inventory closing?

1. After inventory closing, will the cost of an item be adjusted?

2. If yes, the cost will be adjusted at where? Adjust directly to inventory (item) or gain / loss account?

3. If the adjustment happened on inventory (item), will the margin be affected?

4. What will happen on the balance sheet if we never receive the vendor invoice and then we do inventory closing?

5. Where is the journal posting?

6. Will all the posted sales invoices be affected?

Truly appreciated.

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Ludwig Reinhard Microsoft Employee on at

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Hi Avangeline,

For 1): In General Yes unless you use standard costing or moving average costing.

For 2): AX will adjust your inventory value and record an "adjustment" for the price change, meaning your inventory value increases or decreases depending on the transaction and prior postings.

For 3): Yes

For 4): No adjustment will be recorded as only financially "finalized" transactions will be picked up by the closing

For 5): Can you provide more details about your question here? Note that you can identify the journal posting via the closing form if you take a look at the voucher posted. Yet, this is not an ordinary journal as the one you would create e.g. in GL.

For 6): No

Hope this helps,

Ludwig

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Brandon Wiese 17,790 on at

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2) In addition to inventory value being adjusted, the offset to the adjustment will generally post to the same main account where the original transaction posted its offset. In other words, if the inventory issue transaction associated with a sales order is adjusted, then the inventory value and cost of goods sold main accounts will be adjusted in the same step.

4) Adjustments can be made based on only physically updated inventory receipts. In other words, an un-invoiced vendor packing slip can still realize an adjustment.

5) If I interpreted your question correctly, there is no "journal" for inventory recalculation or closing. There is a voucher associated with recalculation or closing, which can be accessed from the same form where those features are started.

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Community Member on at

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Thank you Brandon!

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Community Member on at

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Thanks Ludwig!

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Community Member on at

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Hi Ludwig,

Extension from Question 5.

You mentioned that, this is no an ordinary journal like GL.

isn't you mean there is no debit and credit GL account posted?

May i understand correctly.

Step 1. PO - Item A - $1, GRN - Item A (Qty 2)

Step 2. Un-invoiced stock in inventory

Step 3. Sales Invoice Item A (Qty 1) posted.

Based on current situation, 1 Unit Item A (Cost $1), 1 Unit Item A (COGS $1)

Step 4. Purchase Invoice received (Qty 2) and posted at $1.30.

Step 5. Inventory closing happened.

Inventory closing adjust cost and COGS

debit $0.30 into inventory cost

debit $0.30 into COGS

May i know, is there a credit GL?

thanks.

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Ludwig Reinhard Microsoft Employee on at

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Hello Kapp,

What I meant is that AX always uses journals to create vouchers and always creates a debit and credit transaction. Yet, some journals are created by the system automatically and cannot be influenced by users - such as the transactions created when doing an inventory close or transactions created when running a foreign currency revaluation, etc.

Hope this helps,

Ludwig

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Brandon Wiese 17,790 on at

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The purchase invoice will debit $0.30 into inventory cost.

The closing will adjust the value of the inventory issue, which is a negative quantity and value, by -$0.30 (increasing it to match the receipt value). Thus, credit $0.30 to inventory value, debit $0.30 to cost of goods sold (the original offset).

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Community Member on at

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Thanks Ludwig!

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Community Member on at

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Thank you Brandon to clear my understanding.

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