Using a horizon date

Core TSIs : Contracts : Working with Contracts : Using a horizon date

Contracts can be established for an indefinite period, but accurate calculations of financial commitments and accounting commitments require a defined end date. The horizon date feature allows you to set an end date for these calculations, ensuring consistency and accuracy in financial reporting. A contract has an indefinite period if there is:

• a contract line without an end date;

• a contract line with an end date to which a renewal option is linked with an indefinite renewal term.

The horizon date feature is available for both lease accounting contracts and regular lease and service contracts and includes the following:

• When a horizon date is set on a contract, all contract lines without an end date will use this date for calculating commitments.

• If the horizon date is left empty (only possible for non-lease accounting contracts), the Cash flow calculation – years setting in Field definer determines the number of commitment years. For more information, see Contract settings and Calculating and displaying financial commitments.

• Contract options marked as reasonably certain will be included in the calculations, treated as if they have been executed.