Indexation based on a percentage
The following examples illustrate how price indexation based on a percentage is used.
Example 1 - Indexation based on a percentage
For contract X, the following are defined:
• Contract’s start date: 1/1/2020
• 2 contract lines with start date 1/1/2020
• Indexation method 1:
indexation percentage = 10%
indexation period = every year
indexation percentage = 10%
indexation period = every year
• Indexation method 2:
indexation percentage = 5%
indexation period = every 6 months
indexation percentage = 5%
indexation period = every 6 months
• For contract line 1, price indexation based on method 1 is started at 1/1/2021.
For contract line 2, price indexation based on method 2 is started at 7/1/2021.
For contract line 2, price indexation based on method 2 is started at 7/1/2021.
Indexation is executed up to and including 1-1-2021. The following figure provides an overview after indexation:
Example 2 - Indexation based on a percentage
For contract Y, the following has been defined:
• Contract’s start date: 1/1/2020
• 2 contract lines with start date 1/1/2020
• Indexation method 1:
indexation percentage = 10%
indexation period = every year
indexation percentage = 10%
indexation period = every year
• Indexation method 2:
indexation percentage = 5%
indexation period = every 6 months
indexation percentage = 5%
indexation period = every 6 months
• For contract line 1, price indexation based on method 1 is started at 1/1/2021;
At 3/1/2021, the indexation method is changed from method 1 to method 2.
For contract line 2, price indexation based on method 2 is started at 3/1/2020.
At 8/1/2020 the price has been manually changed to 650. At 3/1/2021, the indexation method is changed from method 2 to method 1.
At 3/1/2021, the indexation method is changed from method 1 to method 2.
For contract line 2, price indexation based on method 2 is started at 3/1/2020.
At 8/1/2020 the price has been manually changed to 650. At 3/1/2021, the indexation method is changed from method 2 to method 1.
Indexation will be executed up to and including 1-1-2022. The following figure illustrates the scenario after indexation:
 | When a contract line based on lease accounting is activated with predefined indexation (based on percentage), the indexation is applied for the whole contract line at activation and then the initial set of accounting commitments are generated . This means that the indexation process takes place at the activation of the contract. |
| | For details on working with lease accounting in Planon, refer to Lease accounting. |