Pro rata commitments
When an amount is changed not at the start date of a financial period which is not closed, the application creates a pro rata commitment. The pro rata commitment represents the subperiod and the part of the payment for that period.
Pro rata commitments provide better auditability of the subperiod and amount. No postings are created for pro rata commitments. Cashflow commitments always show the total amount for the whole financial period and create the corresponding postings.
 | The pro rata commitment always has a reference to the original cashflow commitment it is related to through the Related contract cashflow field. |
This example helps you to understand the behavior of pro rata commitments.
• Three-years lease with 100,000.00 yearly rent, paid quarterly in advance (Start date: January 1st)
• Lease is closed up to June 30th
• Lease amount is changed to 112,000.00; the date effective is September 1st (That is an additional 3,000 per financial period (Quarter). September being the last Month of the 3rd quarter, and additional (pro rata) of 1,000.00 is required
In an open period, a pro rata commitment is created in addition to the existing cash flow commitment for the subperiod 1st to 30th September. The existing cash flow commitments are modified to include the updated pro rata amount.
| | When the lease is closed up to September 30th, a posting is created for the cash flow only and not for the pro rata. |
