About Include physical value
Important
This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
The Include physical value check box on the Inventory model FastTab of the Item model groups form is used to specify whether physically updated transactions are factored into the calculation of the running average cost price for an item.
Include physical value check box status |
Result |
|---|---|
Selected |
Both physically updated transactions and financially updated transactions are used to calculate the running average cost price. |
Cleared |
Only financially updated transactions are used to calculate the running average cost price. |
The Include physical value check box produces slightly different results, depending on the inventory model you use.
If you select the Include physical value check box when you use the FIFO, LIFO, or LIFO Date inventory model, inventory close also makes adjustments to physically updated transactions.
If you do not select the Include physical value check box when you use these inventory models, inventory close makes settlements only to financially updated transactions.
When you use the weighted average or weighted average date inventory model, inventory close settles only financially updated transactions, regardless of whether you select the Include physical value check box.
Example
You have selected the Include physical value check box and receive the following purchase orders:
Purchase order for a quantity of 2; cost price is USD 10.00; packing slip updated
Purchase order for a quantity of 3; cost price is USD 12.00; invoice updated
In this case, the running average cost price will be USD 11.20, because both physically and financially updated transactions are used to calculate the cost price.
Example
You have not selected the Include physical value check box, and the cost price on the item setup is USD 10.00. You receive the following purchase order:
- Purchase order for a quantity of 20; cost price is USD 12.00; packing slip updated
When a sales order is posted, the posted cost amount is USD 10.00, because the running average cost price will not include physically posted transactions.
Note
For comparison, if Include physical value had been selected for this item, the sales order would have been posted with a cost amount of USD 12.00.
See also
About running average cost price