12. Consistency in data and summary of calculation rules

To make a correct calculation, the registration needs to be consistent, and certain rules that are described below need to be followed. Before data is uploaded in the calculation model, consistency in data is verified and certain rules are applied.

Dates – Dates in the model need to follow in a subsequent pattern, because we cannot have overlapping payments in periods. Therefore, we only use end date after the first period. The start period for subsequent periods is automatically set to the first date after the end date for the preceding period.

Calculation rules – Certain rules have been applied in the solution and can’t be overruled. Below is a summary of the rules applied. (Please read the documentation of the calculation for a more detailed explanation of the calculation rules)

• The liability only concerns itself with complete months, meaning that one can predict what will happen by ignoring which day of the month something happens on.
• We assume that all payments occur at the first day of each period for pre-paid leases.
• We assume that all payments occur at the last day of each period for post-paid leases and that the payment occurs at the end of the previous month for shift payments leases.
• The right-of-use asset is depreciated with an equal amount every month, but there are two exceptions to this:
  • If the start of the lease is not the first of the month, it will depreciate by the number of days remaining in that month
  • If the end of the lease is not the last of the month, the amount is depreciated by the number of days until the end date that month
• If the lease has multiple different payments as part of the contract, the cash flow is created using multiple payment periods.
• There are quite a few metadata in IFRS 16 that affect either the liability or the right-of-use asset by a one-time amount, rather than a recurring cash flow, such as prepayments, lease incentives, initial direct cost, asset removal obligation, etc.
• When it comes to fixed annual adjustments, our calculation never adjusts any initial payment value set by the user.