Real Property / Chargeback & Invoicing

Chargeback - Proration Calculations

This topic documents the proration calculations that occur when you generate chargeback from the Chargeback Cost Wizard's Generate Chargeback tab.The calculations discussed in this topic apply to costs whose cost categories proportionately distribute (prorate) costs by specifying one of the following values for the Chargeback Definition (Assigned To /Rolls Up To/Prorates To field):

Assigned To/Rolls Up To/Prorates To Value	Prorates
Buildings-Properties-Leases	Properties to Leases
Buildings-None-Leases	Buildings to Leases
Leases-None-Departments	Leases to Departments
Properties-None-Buildings	Properties to Buildings
Properties-None-Leases	Properties to Leases

In order to support cost categories that both roll up and prorate values (cost categories with the Buildings-Properties-Leases value), the Charge Back Costs action first rolls up costs and then prorates the rolled up costs. For information on how the routine rolls up costs, see Chargeback - Roll-up Calculations.

How Prorated Costs are Calculated

When proportionately distributing (prorating) costs, the Charge Back Costs action uses the following calculations.

The table describes how costs are calculated from the Real Property domain.

Proration	Cost	Cost Calculation
From Properties to Leases	Prorated Cost for each Lease =	[Cost for property as a whole ] X Area Neg. Rentable of lease] [Total Area Neg. Rentable of all leases on the property]
From Buildings to Leases:	Prorated Cost for each Lease =	[Cost for building as a whole] X Area Neg. Rentable of lease] [Total Area Neg. Rentable of all leases in the building]
From Properties to Buildings	Prorated cost for each building=	[Cost for the property as a whole] X [Building Rentable Area] [Total building Rentable Area for all buildings on the property] Note: The Properties to Buildings proration method sums areas for suites, groups, or rooms, depending on your chosen Lease Area method.
Prorating Lease Costs to Departments	Prorated cost for each department =	[Lease Cost] X [group/room chargeable area for the dept. for the lease] [Total group or room chargeable area assigned to the lease] See About Chargeable Area. Note: To use this chargeback method, you must select your Lease Area method to be Group or Room. When you generate chargeback, the action will update the chargeable areas for Groups or Rooms based on your chosen Lease Area Method.

About Chargeable Area

The calculations for charging back to departments use the group’s or room’s chargeable area. This is the actual area a room or group occupies plus a proportion of facility common area calculated by the chargeback. If you have designated common areas for the room using the Space domain, then these common areas are used to calculate the chargeable area. If there are no common areas prorated to the site, building, or floor that the lease is associated with, then the chargeable area is equal to the group or room area. You can view the Chargeable area by selecting Chargeback & Invoicing / Background Data / Edit Rooms - Edit Groups. See Chargeback Calculations and Space Chargeback Overview.

How the Chargeback Action Prorates Costs

The Charge Back Costs action prorates Cost records to generate Scheduled Cost records by performing these steps:

• Examines all Cost records with a Chargeback Status of:
• NOT CHARGED BACK- This is the default assigned to Cost records when they are approved from Scheduled Cost records.
• CHARGEBACK SCHEDULED - These costs have been charged back but not approved. The action will delete these scheduled costs and create new scheduled chargeback costs.
• BAD OWNER and DEPARTMENT NOT IN METHOD-These costs were not charged back due to missing data or a cost category that called for prorating costs to departments, but the lease area method was suites.

• Examines all Scheduled Costs records with a status of AUTO-ROLLUP, so it can charge back costs that are to be rolled up and then prorated.
• Updates area totals and updates prorated areas for groups, rooms, or suites, depending on your chosen lease area method. See Select Lease Area Method.
• Proportionately distributes these Cost records to buildings, leases, or departments, depending on the value for the 'Prorates To' portion of the 'Assigned To - Rolls Up To - Prorates To" field for the cost category. It does this according to the primary key of the table specified in the Prorates To portion of the assigned cost category's Assigned/Rolls/Prorates value. As the last portions of the above values indicate, this can be either the Buildings, Leases, or Departments table.
• For costs that are charged back to leases, checking if any chargeback cost agreements apply to the rolled up/prorated costs, and adjusting the chargeback if necessary.
• Generates a Scheduled Cost record and completes its Amount - Income/Amount Expense field with the prorated amount, and completes either its Building Code, Lease Code, or Department Code field.
  
  When Cost records are assigned to more than one entity, the primary key for any owner entity that is not specified by the chargeback condition is not copied to the resulting Scheduled Cost record.
  
  For instance suppose you are changing back property costs to a lease and that a cost has both a Property Code and a Building Code. The chargeback action will copy the Property Code to the resulting Scheduled Cost record, but will not copy the Building Code, since the cost may be prorated to Leases which belong to the same property, but not to the same building. Nevertheless, the memo field of the prorated scheduled costs will contain information about the source of the costs.
• Sets the memo field value in the resulting Scheduled Costs record to:
  
  "Prorated portion from {tablename-id_value} of {source cost category} -
  {source cost memo}" Where:
  {tablename-id_value} = "Lease" or "Building" or "Property"
  {source cost category} = cost category of source Cost record
  
  
• Sets the Status of the resulting Scheduled Cost records to AUTO-CHARGEBACK.
• Updates the Chargeback Status field of the Cost records from which the prorated and rolled up costs were generated by changing their values from NOT CHARGED BACK to CHARGED BACK - SCHEDULED. (After you approve chargeback costs, this value changes again to CHARGED BACK - APPROVED.)

Also note that:

• Direct bill items need no manipulation. For Cost records whose cost categories call for direct billing, the chargeback action sets the Chargeback Status field to CHARGED BACK - SCHEDULED and does not generate a Scheduled Cost record.
• Once the action generates the Scheduled Cost records, it checks the Chargeback Cost Agreements table to see if there are specified rules (chargeback cost agreements) that over-ride the values of the generated Scheduled Cost records that are assigned to leases. It then updates these Scheduled Cost records as necessary. See Chargeback Cost Agreements table for more information.

See Also

Chargeback - Roll-up Calculations

Chargeback Proration Diagram

Example of Charging Back to Leases

Example of Charging Back to Departments

About Cost Categories

Generate Chargeback Tab

The Nine Chargeback Definitions

Costs table