The Fixed Receipt price field in the item model group in D365FO (or AX)

If you work with inventory in D365FO (and older AX versions), the item model group is one of the most important parts to configure when it comes to inventory valuation. But why is there a ‘fixed receipt price’ field in the item model group?

To understand the meaning of this field, we need to go back to the older versions of AX. Have a look at the print screen that I made today in the inventory models available in Axapta 3 (the version where I start working with in 2006...):

I only have the Dutch language available in Axapta 3 (indeed, it is not that easy as in D365FO to change language), but in this list you see FIFO, LIFO, LIFO date, weighted average and weighted average date. No Standard costing here!

In Axapta 3 on the item model group there is a field called ‘standard cost price’ that you can select:?

So working with standard cost principle in Axapta 3 meant that organizations selected the ‘standard cost’ field on the item model group. Selecting this field made it possible to use a fixed receipt price (standard cost price) by purchasing goods of these items, even if the valuation method was FIFO:

Differences between the fixed receipt price and the purchasing price where posted on the profit and loss account for it, so basically standard costing was used and not the FIFO method. Other standard costing postings like revaluation the inventory value after changing the cost price had do be done manually with adjustments.

So to get the full standard costing principles Microsoft added a new standard cost inventory model in AX 2009. From that moment you could select the standard cost valuation method in the item model group, like you can do now in D365FO:

But the field for the old standard costing method still exist in the item model group and is renamed in… Fixed receipt price. If you look at the Control Name of the field, you still see the history of the standard costing method:

So basically there are still two options for working with a standard cost valuation in D365FO.

What are the differences between the fixed receipt price and standard cost inventory model?

1.??????The settings of the main accounts for purchasing price differences must be entered on different places. By fixed receipt price you enter it in the ‘Purchase order’ section of the posting profile, by standard cost you enter it by the ‘standard cost’ area.

2.??????The fixed price receipt field will only post purchase price differences automatically. The standard cost inventory model will do the necessary automatic postings for the total standard costing process. That's why in the 'Standard cost variance' section you can also enter the main accounts for other posting types, like for revaluate the inventory value by changing cost prices.

The conversion tool

Creating the new standard cost method in AX 2009 also ended up in a conversion tool to change items from the old standard cost functionality to the new standard cost functionality, even if there were posted transactions on the items. Also this tool is still available in D365FO:

This option can still be useful by changes in accounting policies, I have used it by example for a customer that changed their valuation method from FIFO to standard cost.

What about using the fixed receipt price field itself?

To be honest, I think there is no much reason any more to use the fixed receipt price field. If you really want the standard costing principle, I think you will always use the standard cost inventory model and not the field fixed receipt price.

But of course, if you know cases where this field is still useful and helpful, please let me know ??!