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Exact Cost Reversing Manadatory

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Posted on by JE-20081519-0

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Hi:

I'm finding conflicting information online as to what feature the "Exact Cost Reversing Mandatory" toggle in Sales & Receivables Setup is supposed to conduct.

One person says that this has to do with the dollar amount that the item is returned for.

Another says that turning on the toggle simply means that a return will not be performed if the corresponding Sales Invoice hasn't been posted.

So, what function does this toggle serve?

Thanks!

John

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Dynamics 365 Business Central

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Mansi Soni 10,184 Super User 2026 Season 1 on at

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Hello,
When this toggle is enabled (True):
Business Central requires that item returns or credit memos reverse the exact same cost as the original sale.
This only applies to items tracked by costing methods (like FIFO, LIFO, etc.).
It ensures the cost posted to the general ledger for the return matches exactly the cost from the original sale (from the original outbound entry).
The system links the return line to the original sale line and reuses its cost — this is crucial for correct cost of goods sold (COGS) reporting.

What does this mean in practice?

If a sales return is processed and the Exact Cost Reversing Mandatory is ON, the system forces the user to link the return to the exact outbound item ledger entry created during the original sale.
If no original sale (i.e., sales invoice) exists for that item, you cannot post the return — which aligns with the second explanation you read: it requires a prior sale to reverse the cost.

Summary of Behavior:

So, both statements you found are partially correct, but incomplete:

Dollar amount relevance — correct in that it ensures cost figures are matched.
Invoice requirement — also true, because reversing requires an original transaction to pull cost from.

Regards,
Mansi Soni

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RockwithNav 9,195 Super User 2026 Season 1 on at

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To make it very simple for you, You cannot reverse any transaction until and unless you go and apply to the corresponding posted invoice for which you want the reversal, so that system can do Exact Cost Reversing.

If you do without applying then you will end up with an error message.

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Gerardo Rentería Ga... 27,310 Most Valuable Professional on at

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Hi, good day
I hope this can help you, and give you some hints.

Exact Cost Reversing Mandatory explained in Dynamics 365 Business Central

Exact Cost Reversing in Microsoft Dynamics NAV 2013 - ArcherPoint

Best Regards
Gerardo

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