Inventory Close Complete Adjustment Settlement

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Hi AX Community

Our company is using the FIFO stock model with "Fixed receipt price" and allow Negative Physical stock. We recently ran a stock close and don't understand the settlement of a posted count journal.

Example:

The item has the following Cost prices activated:

R223.38 Activation Date: 2018-10-01 Activated on 2018-10-01

R200.71 Activation Date: 2018-08-13 Activated on 2018-08-13

On 2018-09-30 we posted a counting journal and it costed it at R200.71 which is the active cost for September.

Count Journal

What we don't understand is the settlement which took place when we executed the stock close for September.

The cost of the Counting Journal (Receipt transaction) was adjusted to the active price of October resulting in all the issued transactions for September (settled against this transaction) to be adjusted to the October cost of R233.38

All issue settlement show the Settlement Principle as FIFO

The receipt settlement for the counting journal is "Adjustment" with the Settlement type being "Complete adjustment"

7457.Settlement.JPG

Does anyone know why AX would have adjusted it this way?

Please let me know if you require any further information.

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guk1964 10,888 on at

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I don't understand the problem. Is this treatment any different from any prior inventory close you ran?

If there was no need for settlement and adjustments then there would be no need for inventory close.

When did you last run inventory close?

Your inventory transactions are not settled until closed. Ax will use a running average day by day as a pragmatic best estimate, because the inventory financial update may not have happened. At month end close it will recalculate against the inventory accounting valuation principle, in your case FIFO and will then adjust the transactions costs and closing balance value on that basis. What is not financially updated will be reviewed again in the next period inventory close.

If you want to check the detail of the calculations, then there are reports and inquiry screens, but that is not practical for all items.

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Community Member on at

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We run the stock close monthly and I understand that settlements and adjustments are required, but, if my receipt was in September... and the issues are in September. Why does AX adjust the cost of my transactions to the cost which is only active as from 1 October instead of adjusting it to the cost which is active for September?

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André Arnaud de Cal... 301,069 Super User 2025 Season 2 on at

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Hi Charne,

Are you mixing concepts? Cost activation is not working together with FIFO. FIFO is using the prices known for receipts of goods. As you can see, the counting journal had a zero cost. If you want to have a standard cost price, are you using the correct inventory cost model?

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Community Member on at

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Thank you for everyone who responded!

we use the FIFO stock model with "Fixed receipt price", this is where the active pricing comes in.

Our partner had a look and confirmed that the counting journal adjustment didn't come from the stock close but was posted when the counting journal was posted. The counting Journal was created in September but was posted in October. Unfortunately the system doesn’t take into account the date on the journal line when determining what cost price to use. It used the active price on the date of posting. They were able to recreate this in test.

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guk1964 10,888 on at

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It's possible that this hotfix can help https://support.microsoft.com/en-ae/help/2690075/the-fixed-receipt-price-parameter-does-not-work-when-you-post-a-purcha

Did you have the same problem on other inventory closes?.

To recap;

Fixed receipt price is essentially the older form of standard costing used per Ax 2012. The fixed receipt price is a principle for inventory valuation that sets the price of receipts to the active planned cost (or basic cost), of a product. When the check box is selected, this is how receipts and issues are posted:

Purchase receipts – Posts at the actual cost.

Purchase invoices – The price difference between the actual cost and the fixed receipt price posts to the general ledger as a variance. The amount posts to the loss or profit account for the fixed receipt price. Inventory is also updated based on the fixed receipt price.

Sales order packing slips and sales invoices – Posting is at the estimated cost.

When you run either an inventory close, or a recalculation, with this check box selected, the value of issue transactions is adjusted according to the price that is specified in the Price field. (When this check box is cleared, then the value of issue transactions is not adjusted according to this price.)

The option “Fixed receipt price” is available for valuation methods FIFO, LIFO and weighted average cost. This option fixes the receipt cost price in advance, preventing change when recording a transaction. The cost price and cost amount calculates according to the valuation method and therefore always complies with the Fixed receipt price cost price of the item, as long as you do not change the item cost price.

So did you change the cost price in the period? When you change the item cost price, the consumption of existing stock in inventory will comply with the old cost price, and thereby calculate the cost amount of issue transactions according to the FIFO valuation method. That is why, inventory closing is also required for the option “Fixed receipt price.

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