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Weighted Average inventory close - Adjustment should be zero?

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Posted on by lmai

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Hi All,

My inventory method is the Weighted Average. During the month, D365 uses the Moving Average method. When I close inventory at the end of the month, I shouldn't expect any adjustment, correct? The only time I expect the adjustment to be posted is when I use FIFO and LIFO, correct? Thanks so much!

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André Arnaud de Cal... 301,035 Super User 2025 Season 2 on at

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Hi Kim,

Also the weighted average will have adjustments. You can read the documentation for more understanding. E.g. start on the next page: docs.microsoft.com/.../weighted-average-physical-value-marking

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lmai 2,438 on at

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Really? I don't think I can process this information. :-)

Thanks, though.

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Junaid Idrees on at

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Hi Kim Johnson,

During inventory close, Weighted Average/Weighted Average date/Moving Average all will have adjustment entries.

Can you elaborate What costing method you are currently using in your business?

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Ludwig Reinhard Microsoft Employee on at

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Good morning Kim,

If you use a weighted average inventory valuation then I would expect that you see adjustments when you close your inventory. The only situation that I could imagine is if the prices of the products purchased during the month did not fluctuate at all; in other words, if your prices would have stayed constant.

I would recommend having a look at the following site: fedotenko.info/.../

It is old but still gives you some good and deep insights into what happens when closing inventory.

Note:

During the month, D365FO does not use a moving average valuation. It is similar to what accountants call moving average but I would rather call it running moving average price because it does not necessarily reflect the moving average value/price that is mentioned and described in accounting standards. Its similar and close to it but it fluctuates and changes with every purchase. Just have a look at the site that I shared. Things should hopefully become clearer then :-)

Best regards,

Ludwig

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lmai 2,438 on at

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Thanks, Ludwig, for the link. It helps me gain more understanding of the inventory close process.

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André Arnaud de Cal... 301,035 Super User 2025 Season 2 on at

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Hi Kim,
[quote user="Kim Johnson"]
Really? I don't think I can process this information. :-)

Thanks, though.
[/quote]
Is the documentation that hard? ;-)

If you need some more clarity on the documentation or more examples, please feel free to ask on this forum.

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