A country-specific hotfix is available to match financial inventory value and physical inventory value in the stock transfer process in Microsoft Dynamics AX 2009 Service Pack 1 with the India localization layer installed

According to Indian Accounting Standard, the "Goods in Transit" account for the stock transfer process should be a part of the total inventory value that is displayed in the chart of accounts. Additionally, the inclusion of the "Goods in Transit" account in the total inventory value should create no conflict for the matching of financial inventory value and physical inventory value.
On real time shipment and receipt of inventories, the "unrealized gain/loss" account and the "Goods in Transit account" should be squared off and create no effect on the inventory valuation at the overall organization level.
However, in the stock transfer process, when you transfer an inventory from one location to another location at a value higher than cost to generate true location wise profitability, the "Goods in Transit" account for the stock transfer process and the unrealized gain/loss because of the price difference may affect the inventory valuation.
According to the existing stock transfer feature that is based on the "Two step Stock Transfer", the "Goods in Transit" account is updated when the shipment and receipt for the transfer order are posted.
In this situation, the total inventory value of the ledger accounts may not match with the physical inventory value. Therefore, the financial inventory value and the physical inventory value are not match for the inventory.
A country-specific hotfix is available to match financial inventory value and physical inventory value in the stock transfer process. To resolve this matching issue, a new ledger account, the Interim Transit account is added in the transfer order for inventory posting. In this situation, the price difference between the posting of shipment and receipt, and taxes amount flow to the new account. Therefore, there is no effect on the inventory valuation. Additionally, when you run the "Potential conflicts - inventory and General ledger" report for stock transfer transactions, no variance will be displayed.

Hotfix information

A supported hotfix is available from Microsoft. There is a "Hotfix download available" section at the top of this Knowledge Base article. If you are encountering an issue downloading, installing this hotfix, or have other technical support questions, contact your partner or, if enrolled in a support plan directly with Microsoft, you can contact technical support for Microsoft Dynamics and create a new support request. To do this, visit the following Microsoft website:

https://mbs.microsoft.com/support/newstart.aspx

You can also contact technical support for Microsoft Dynamics by phone using these links for country specific phone numbers. To do this, visit one of the following Microsoft websites:

Partners

https://mbs.microsoft.com/partnersource/support/

Customers

https://mbs.microsoft.com/customersource/support/information/SupportInformation/global_support_contacts_eng.htm

In special cases, charges that are ordinarily incurred for support calls may be canceled if a Technical Support Professional for Microsoft Dynamics and related products determines that a specific update will resolve your problem. The usual support costs will apply to any additional support questions and issues that do not qualify for the specific update in question.