Inventory Close adjustments against Transfer Journal transactions

We use Inventory Transfer Journals to move items from one bin location to another within the same warehouse, as instructed by our consultants. We have noticed that the Inventory Close and Adjustment program financially adjusts both transactions (in and out) for some reason.

For instance, the Out transaction will have a $172.39 adjustment against it, increasing the Financial Cost Amount (even when there’s zero on-hand), and will also have a $-172.39 adjustment against the In transaction, reducing the Financial Cost Amount (with or without on-hand qty).

My question is, why does this happen? Are we using the Transfer Journals incorrectly? Do we have a setting wrong in our Inventory module? Is this a bug? And finally, how do we go about correcting these?

We use Dynamics AX 4.0.2503.1142 using the Average Weighted Date inventory model.


Well the actual affect is zero to the business and in the balance sheet. The inventory asset account should be reduced and increased on the movement of inventory against the dimensions you have set it up to transact against.

I presume you have financial inventory selected on the location option of the dimension group of the item?

Thank you for the reply!

Actually, we were initially set up with Financial Inventory selected only for Warehouse, not Location. I think you have pointed out the crux of the problem. We are currently testing the change of this setting in a test environment. It looks like we have to re-Close our periods for it to take effect on already-closed transactions.

Once our testing is complete, I will reply with the result. Thanks again!