We have contractual discounts with customers that requires the % discount off to be calculated on the Gross Selling Price only. D365 will calculate the % discount on the Gross Selling Price - Amount Discounts (via other Trade Agreements or Trade Allowance Agreements). This is also referred to as the Net Price.

Example without Amount Discounts:
Customer Gross Selling Price $15.00
Contractual Discount % 5%
Calculated Discount Off Invoice $0.75
Net Price $14.25

If the customer has an additional $1.00 discount set up, the requirement would be:

Gross Selling Price $15.00
Contractual Discount % 5%
Calculated Discount Off Invoice $0.75
Amount Discount $1.00
Net Price $13.25

D365 calculates this as follows:

Gross Selling Price $15.00
Amount Discount $1.00
Net Selling Price $14.00
Contractual Discount % 5%
Calculated Discount Off Invoice $0.70
Final Net Price $13.30

As illustrated above, the Net Price charged to the customer would be $0.05 more than what the contractual obligation we have with them.