Reservation Rates

Introduction

Reservation rates are either a percentage or amount depending on how the paying unit is defined. Percentage is entered if paying unit is between 01-05, and amount per quantity is entered if paying unit is between 10-13. These rates are used to calculate the accruals reservation amount.

Reservation amounts are calculated based on how the trade agreement is defined. Initially, a reservation rate is taken from the recipient when no scales are defined. When scale rates are defined for a recipient, rates used to calculate the accruals are either the best possible trade agreement rate, or through a scale based on the defined forecasted generating values.

Fixed reservation amounts are used for fixed amount agreements.

Define trade agreement rate per recipient

Reservation rates are entered in the recipient as either percentage or amount depending on the value set on the paying unit in the trade agreement header. Reservation rates for the recipient are defined in 'Trade Agreement Recipients. Open' (OIS431). This can be accessed by using related option 11 in 'Trade Agreement. Open' (OIS430).

If the advance method on (OIS430/E) uses a fixed rate or fixed amount, then the reservation field in (OIS431) is also used to calculate the advance payment to the recipient during the agreement

Define trade agreement recipient scale rates

Trade agreement scale rates are entered in a table as either percentage or amount depending on the value set on the paying unit in the trade agreement header. If dynamic percentage advance method is set for the trade agreement, the scale is also used to retrieve the corresponding percentage or amount defined against the generating value specified in the scale.

Trade agreement scale rates are defined in a table containing a scale and corresponding limits, which is expressed in the generating unit, for calculation of the reservation amount.

The entered rates are either a percentage or an amount of the paying value, depending on the setting of the paying unit used on (OIS430/F).

Percentage is entered if paying unit is between 01-05 up to 6 decimals.
Amount per quantity is entered if paying unit is between 10-13 up to 4 decimals.
It is not valid to enter scale rates for the recipient when paying unit on (OIS430/F) is set to 21.

Rates are defined in 'Trade Agreement Scale Rates. Open' (OIS432). This can be accessed by using related option 12 in (OIS431).

Rules to retrieve the rate to apply upon calculation of reservation amount for the qualified invoice lines are:

When there are no scale rates defined in (OIS432) for the recipient, the rate defined in (OIS431) is used to calculate accruals instead.
When a scale is defined in (OIS432) and when scale code defined on (OIS430/F) is set to '0-Best possible trade agreement rate', it is mandatory to set the normal rate to be retrieved for the recipient. The normal rate defined is used in the calculation of the reservation amount.
When a scale is defined in (OIS432) and when the scale code defined on (OIS430/F) is set to '1-Graduated trade agreement rate', the rate based on the generating value of the recipient is retrieved, based on the defined scale of limit values and its corresponding rate.
When a scale is defined in (OIS432) and when the scale code defined on (OIS430/F) is set to '2-Graduated rate - split rate', qualified invoice lines that are stored in 'Trade Agreement Transaction File. Open' (OIS435) are split according to the limits and corresponding rate defined in (OIS432).
When a periodic settlement is activated for a trade agreement that has a scale code set to '1-Graduated trade agreement rate' or '2-Graduated rate - split rate' in (OIS430/F), the retrieval of reservation rate is based on the generating value in the range of period per periodic settlement frequency set in (OIS430/E). For each range of a periodic settlement period, the generating value is reset to retrieve the rates based on the scales defined for the recipient.

For instance, a trade agreement has a settlement frequency set to 2 periods. For periods 1 to 2, the reservation rate based on the accrued generating value of the recipient is retrieved based on the defined scale of limit values and its corresponding rate. The accrued generating value will then be reset to retrieve rates based on the accrued generating value for the next periodic settlement of periods 3 to 4.

Note: The settlement frequency parameter on (OIS430/E) and per settlement parameter on (OIS430/F) are protected when the trade agreement is set to active.

Define trade agreement payment schedule per recipient

The payment schedule per recipient is defined in 'Trade Agr Pmt Sched per Recipient. Open' (OIS449). This can be accessed by using related option 19 in (OIS431), and if the following conditions are met:

Paying unit on (OIS430/F) is set to 21-'Fixed amount'
Status of the trade agreement is set to 40-'Active' or 70-'Hold'.

In (OIS449) a percentage must be entered per period. The percentage distributed across the periods must total 100. Note that if the trade agreement covers several years, the percentage across those years must still total 100. The reservation entered on (OIS431/E) is used to calculate the reservation amount on the accrued trade agreement. If the validity of the recipient is several years, the percentage is distributed across those years.

Submit the update by using action F16-'Update from agreement' in order to reflect the fixed reservation amount per period in 'Bonus Status per Recipient. Open' (OIS433), 'Bonus Status per Recipient and Prd. Open' (OIS434), and (OIS435). Status in (OIS449) is changed from '10' to '90' upon running the update.

The reservation amount defined is also used by agreements using a fixed amount advance method.

Note: It is not possible to access option 12 from (OIS431) when the paying unit for the trade agreement is set to 21-'Fixed amount' on (OIS430/F).