# Derivation of carve amount

After the allocation currency is determined, the allocatable functional price, the extended fair value price, and the allocated amount must all be calculated in the allocation currency. The calculation is done based on the line level exchange rate.

In the following example, the allocation currency is determined to be the functional currency, which is USD.

SO No Ext. List Price Ext. Sell Price Item T.Curr F.Curr Fair Value % F.Ex Rate G.Ex Rate

1

1000

800

Hardware

USD

USD

90

1

1

2

1200

1000

Support

EUR

USD

75

0.8

1

3

800

600

PS

USD

USD

60

1

1

The extended fair value price is calculated based on the following formula and the RSSP% can also be derived based on the extended fair value prices.

Ext. Fair Value = Ext. List Price * Fair Value% * F.Ex Rate

SO No Ext. List Price (A1) Item T.Curr F.Curr Fair Value% (B) F.Ex Rate (C) G.Ex Rate (D) Ext. Fair Value (A1*B*C) RSSP

1

1000

Hardware

USD

USD

90

1

1

900

0.428571

2

1200

Support

EUR

USD

75

0.8

1

720

0.342857

3

800

PS

USD

USD

60

1

1

480

0.228571

Total

3000

2100

1.00000

The allocatable functional price is calculated based on the following formula:

Allocatable Functional Price = Ext. Sell Price * F. Ex Rate

SO No Ext. Sell Price (A2) Item T.Curr F.Curr Fair Value % (B) F.EX Rate (C) G.EX Rate (D) Allocatable Func. Price (A2*C)

1

800

Hardware

USD

USD

90

1

1

800

2

1000

Support

EUR

USD

75

0.8

1

800

3

600

PS

USD

USD

60

1

1

600

Total

2400

2200

The allocated value can be derived based on the allocatable functional price and RSSP.

SO No Item T.Curr F.Curr F.EX Rate (C) G.EX Rate (D Ext. Fair Value Price RSSP Allocatable Func. Price Allocated Func. Price

1

Hardware

USD

USD

1

1

900

0.428571

800

942.86

2

Support

EUR

USD

0.8

1

720

0.342857

800

754.29

3

PS

USD

USD

1

1

480

0.228571

600

502.86

Total

2100

1.00000

2200

2200

The carve amount can be calculated based on the allocatable functional price and the allocated functional price as follows:

SO No Ext.List Price Ext. Sell Price Item Allocatable F.Curr (A) Allocated F.Curr (B) Carve Amount

(B-A)

1

1000

800

Hardware

800

942.86

142.86

2

1200

1000

Support

800

754.29

-45.71

3

800

600

PS

600

502.86

-97.15