Price Index Functionality on Leasing Line

When connecting a leasing charge to a leasing line, a price index ID can be set in 'Rental Agreement. Connect Additional Charge' (STS103). This can be set manually or as default from the agreement order type.

If a price index ID is set, this means that the curve for the leasing charge can be updated in a batch from 'Leasing Price Index. Enter Value' (LTS401) or for the specific leasing charge from (STS103/E).

This is a description of how to work with price index functionality in (STS103) and how to trigger a price index update from (STS103/E).

How to do price index update in batches is described in Update of Leasing Charge using Index Update in (LTS401).

Description of fields on (STS103/E) related to index price functionality

'Original index value':

This value is used as input in the calculation when creating or recalculating the curve in 'Rental Charge Curve. Open' (STS111) or when doing a price index update.

'Original index value' is set as default from (LTS401) but can also be manually changed. If this is done, the periods in (STS111) are recalculated based on the new original index value.

'Current index value':

'Current index value' is set as default from (LTS401).

When an index update is done from (LTS401) for the price index ID set on (STS103/E), this field is updated with the new, latest index value set in (LTS401).

If this field is manually changed on (STS103/E), a new index update is done for this additional charge, in the same way as when price index update is done in (LTS401).

'Charge':

This fields holds the information of the original price for the leasing charge, which is used as input in the calculation when creating or recalculating the curve in (STS111) or when doing a price index update.

Adding a leasing charge

When adding a leasing charge, manually or automatically, and a price index ID is set, the fields 'Original index value' and 'Current index value' are set with a default value from (LTS401).

'Original index value' is set by default and saved with the value valid from the start date of the leasing line.

'Current index value' is set by default and saved with the latest value in (LTS401).

If you want to change these values, you must do that after you have created the leasing charge.

When the additional charge is connected, the curve in (STS111) reflects any index variations that already exists in (LTS401) for the agreement period.

If you do not want existing future index variations to be reflected in (STS111), you set 'Current index value' to the same value as 'Original index value' after creating the charge. When you confirm the update on (STS103/E), (STS111) is recalculated to have the same charge for all periods.

Update a leasing charge

A leasing charge can be updated during the lifetime of the agreement. If the leasing charge is changed in combination with period 1, all periods in (STS111) are affected. If period is set to a value greater than 1, only selected periods are updated.

The fields that can be updated in combination with a period greater than 1 are 'Charge', 'Original index value', and 'Current index value'. If you change 'Current index value' a price index update is run. See Price index update from (STS103).

Price index ID can also be changed during the lifetime of the agreement. This affects all periods, no matter what is set as from period. If price index ID is changed, 'Original index value' and 'Current index value' are updated according to the new price index ID. All periods in (STS111) are updated.

If you remove price index ID, all periods in (STS111) are based only on the input from the charge in (STS103).

Note: If any of the selected periods to update have already been invoiced, those periods are not affected by the update.

Price index update from (STS103)

A price index update of a leasing charge can be triggered from (LTS401) or (STS103).

If you trigger it from (LTS401), all leasing charges with this price index ID connected and valid periods for the date set in 'Leasing Price Index. Enter Value' (LTS401) are updated, and the curves are recalculated.

If you trigger it from (STS103) only the selected leasing charge is updated, and the curve is recalculated.

To trigger a price index update from (STS103) for a specific charge, set a new 'Current index value', select from which period this should affect the curve and then press Enter. If you also change 'Original index value' or charge price before confirming, these new values are also considered during the calculation.

Note: If a new price index update is done in (LTS401), any index updates previously done in (STS103) for a specific leasing charge with this price index ID are overwritten. Also, if any other changes are done on (STS103/E), for example changing charge price, new periods are calculated in (STS111) based on index values in (LTS401). Index updates previously made in (STS103) are not considered.

Calculation of curve

The setting of 'Index share - %' in 'Rental Line. Convert to Leasing' (STS106) affects how the curve in (STS111) is calculated:

If 'Index share - %' is blank, the curve is calculated using the charge price stored on (STS103/E), divided by the original index value stored on (STS103/E), multiplied by the index value set for the period in (LTS401).
If 'Index share - %' contains a value, the curve calculation is based on this percentage of the total leasing price. The index adjustment is added proportionately to all leasing charges connected to the leasing line with the same price index ID.

The calculated value is stored as a rental charge amount per period in (STS111).

See Price Index Share Percentage on Leasing Line for how 'Index share - %' affects the curve in (STS111).

Calculate function in (STS103)

When you use F14='Calculate' on (STS103/E), 'Current index value' is reset and records in (STS111) are recalculated, to reflect the current setup in (LTS401). 'Original index value' and charge price set on (STS103/E) remain.

F14 should be used with caution if an index update has been done from (STS103), because that update is then lost.

Using F14 can be a way to reset the calculation to its original setup, if any mistakes have been done in (STS103) and curves have been incorrectly updated.

Changing agreement period on a leasing line

If the start date of a leasing line is changed after leasing charge has been created, the charge amount for the records in (STS111) is not recalculated. However, the periods in (STS111) are updated according to the new valid from and valid to dates.

If the charge amount for the periods should be updated, change 'Original index' in (STS103/E) if needed and use F14='Calculate' on (STS103/E) to recalculate the curve matching the setup in (LTS401).