You'll need to reference Application Foundation before you can extend any classes from it. The correct sequence would be D - Create the new model, followed by C - Reference Application Foundation. Creating an extension class can only be done after this. Reference: https://docs.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/extensibility/class-extensions https://docs.microsoft.com/en-us/dynamics365/fin-ops-core/dev-itpro/dev-tools/model-split