Base amount indexation

Core TSIs : Contracts : Working with Contracts : Adjusting contract prices using indexation : Base amount indexation

When you index prices according to an indexation method based on a base amount, the new price is calculated as follows:

You can specify base amount indexation methods in Supporting data > Indexation methods. For more information on defining indexation methods, see Indexation methods.

The following example illustrates the working of base amount indexation.

Example

• An index group and index number(s), in this case a year index number

• A base amount indexation method

• The year index number is used as denominator and the index number of the relative year (the year of the index group –1) as numerator. The index number for 2017 is 105 and the index number for 2018 is 110.

• A base amount indexation method and a base amount are entered in Contracts > Contract details > Contract lines.
The base amount is 200. The chosen year for indexation is 2018. The base amount is used to calculate the indexed price.

• After you have indexed the contract, for example for a period of one year, the new price will be: 105/110 * 200 = 190.91

A new contract line and life cycle is subsequently added. The new price is specified in the contract line.

In case of a base amount indexation where the indexed amount has been adjusted due to a minimum indexation, a maximum indexation or a correction factor, the base amount and the base index number are redefined by Planon. The old base amount and number will no longer be applied to future indexations. The base amount will be set to newly indexed amount after adjustment, the base amount index number will be set to the index number used in the last indexation. If the indexation changes retrospectively and the base amounts of the last indexation should not have been changed after all, Planon will restore the original base amounts. Planon advises to check the base amounts.