PMP stock valuation, possible with never calculate and/or closing stocks ?

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Posted on by Lionel Vrac

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Hi,

We are currently replacing an exsiting ERP by Dynamics 365 for ops and the client requirements in term of stock valuation is close the running average principle (item model group = PMP with including physical value checkmarked). The way the cost price is managed on runnin average gives expected results, however, when we run a stock calculation and/or inventory closing (with stock calculation "embedded"..), the result is not the one expected since the client PMP = input/output (amount phys + amount fin) / input/output (qty phys + qty fin).

So the question is : is it possible to have PMP stock valuation principle with never calculate and/or closing stocks ?

Thanks fr your help

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Ludwig Reinhard Microsoft Employee on at

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Hi Lionel,

Theoretically, you do not need to close your stock but not doing that has many disadvantages incl. the system to get slow, reports running

long, you run the risk that people backdate transactions and post into the wrong periods, etc. etc.

Microsoft does not recommend that and there are a lot of threads on this forum that provide you with more arguments why that is a bad practice.

I would like to know why your customer thinks that the running average price is preferrable - for example - over the weighted average, date principle? From an accounting perspective both result in an almost identical outcome.

Do you have a concrete example that illustrates why you cannot do a weighted average date valuation by regularly closing your inventory?

Best regards,

Ludwig

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