Derived Curve

The cash flow Data Sources of type = Derived is available to create cash flow curves within any family (Project/Shell, Summary CBS, CBS, and Business Process (Commitments)).

When creating a cash flow curve within any cash flow family:

Data Sources of type = Derived must be enabled only when there is at least one non-Derived (that is, Baseline, Spends, Forecast, Portfolio Budget, or Custom) type of curve in the family.
If no non-Derived type of curve exists in the family, all Data Sources of type = Derived are grayed out.

When the Derived type data sources are enabled, and the user clicks at such a data source, then a window is displayed that enables the user to enter the details for creating the curve.

The following table explains the fields in the Derived type cash flow curve configuration window:

Option	Description	Behavior
Name	Captures the name of the cash flow curve as defined in cash flow data sources in Company Workspace > Admin mode	Same behavior as in existing cash flow curves-
Type	Captures the type of cash flow curve viz., Baseline, Custom, Forecast, Spends, Portfolio Budget, Derived.	Same behavior as in existing cash flow curves-
Base Currency	Captures the base currency for user to see and make exchange rate decisions.	Behavior: Read-Only Displays the Base Currency as a read-only value
Source Curve	To select an existing curve which should be used as the basis of the ‘Derived' curve.	Behavior - Drop-down List all the non-Derived existing curves within the family in which the ‘Derived' curve is being configured. Values are: <Curve Name> (<Type>), example: Shared (Portfolio Budget). Note: Derived curve cannot be a source curve to create another Derived curve. Required? (Not Null) - Required option. The user must select a value for this drop-down to complete the curve configuration.
Derived Curve Currency	To select the currency that must be used to convert the ‘Source Curve'	Behavior - Currency Selector User has the ability to select any currency from Company Workspace > Standards & Libraries > Exchange Rates (active and future) Required? (Not Null) - Required option. The user must select a value for this selector to complete the curve configuration.
Exchange Rate	To define how the exchange rates must be used so that those can be applied to the source curve data. That is, should the exchange rate be picked up from as defined in Company Workspace > Standards & Libraries, or should the rate be ‘Pegged' to a value as chosen by user.	Behavior: Radio button, two options: Float, Peg Default Value = Float When user selects the option ‘Float', another drop-down option appears: ‘Use Rate as' (see below) .
Use Rate as	To choose how to make use of exchange rate data from Company Workspace > Standards & Libraries, especially if more than one rate is found for a given period (month / year)	Behavior -Radio button Values: - At the beginning of the period - At the end of the period - A weighted average for the period Required? (Not Null) - Required option if ‘Exchange rate' = ‘Float'. If the user clicks ‘OK' on the window without selecting this option, the following message appears: Invalid data entered in the following field(s): Input Required: Use rate as.

If you choose the option ‘Exchange Rate' = ‘Peg', the system provides another block titled ‘Peg Rate as':

If Base Currency = Project Currency, then Peg Rate options should be available for conversion Base Currency -> Derived Curve Currency
If Base Currency ≠ (not equal) Project Currency and Project Properties list the conversion Base Currency -> Project Currency as ‘Peg' option, then also behavior should be same as above, that is, list options only for Base Currency -> Derived Curve Currency
If Base Currency ≠ (not equal) Project Currency but Project Properties list the conversion Base Currency -> Project Currency as ‘Float' option, then peg rate options are available for both:
- Base Currency -> Derived Curve currency
- Base currency -> Project Currency

The following explains the Derived' curve ‘Peg' Rate options:

Option: Peg Rate options

Description: To define the value by which the exchange rate must be pegged. The user will have to enter a value manually, or point to an attribute on shell attribute form / single record BPs within the shell, or choose if they want to use the pegged rate from shell properties. In the latter case, the system will look into the value of the data element each time when rendering the curve.

Behavior: Behavior - Radio button

Base Currency -> Derived Curve Currency: There should be helpful text informing user that conversion is for 1.0 Base Currency -> Derived Currency (text: 1.0 Base Currency =) This is be followed by three options:

Constant
Dynamic
Use Project Rate

Default Radio Option: Constant

If you select 'Constant', the system opens a field (DD = Decimal Amount). The decimal places appear when user types a digit after decimal point, only; otherwise, an integer value will appear. The field lets the user enter an Integer or Decimal value.

Default Radio Option: Dynamic

If you select ‘Dynamic', the system enables two drop-downs which will capture the Data Source for the multiplication factor:

Drop-down 1:

The shell attribute form of the current shell within which curve is being created.

The shell attribute forms of all parent/grandparent shells of current shell in which curve is being created (that is, attribute forms of all shells in hierarchy of current shell, up to the root)

All single record BPs within the shell in which curve is being created.

The above should be prefixed by identifiers ‘Shell Attribute Form / <Shell name>', or ‘Single Record BPs / <BP name>. For example:

Shell Attribute Form / All Properties

Shell Attribute Form / Buildings

Shell Attribute Form / Sites

Single Record BPs / Project Information

Single Record BPs / Important Contacts

…

Drop-down 2:

Lists all linked and custom Data Elements from the selected source form whose Data Definition = Integer / Decimal Amount / Currency Amount. (No standard elements)

The user can change the location / hierarchy of a shell. So the above two drop-down values must be refreshed each time the curve is refreshed.

Note: If the user chooses the options ‘Constant' / ‘Dynamic', then the user must define a value (Constant integer/decimal or Dynamic data source). If not selected, the user will see a standard prompt after clicking ‘OK':

‘Invalid data entered in the following field(s): Input Required: ‘Constant' or ‘Data Source'

The user can choose to use the third option: ‘Use Project Rate' Selecting this option does not open up any additional field, but the system picks up the exchange rate as defined in project properties (described in Peg rate as ‘Use Project Rate' section below). The user receives an applicable error message in either of following scenarios:

The user selects a ‘Derived Curve Currency' which does not exist in Project Properties (Message: Selected currency is not defined in project.), or
The user selects a ‘Derived Curve Currency' which is listed in Project Properties, but its conversion rate is set to ‘Float' (Message: Selected currency does not have pegged rate within project.).

Error should be presented when user clicks ‘OK' on curve configuration window.

Base Currency -> Project Currency

The radio options are for user to select how to use the rate from Company Workspace > Standards & Libraries (label: Use Rate as).

The radio options are visible only if Base Currency ≠ Project Currency AND rate Base Currency -> Project Currency is set as ‘Float' in project properties.

Options same as when user chooses to ‘Float' rate:

You can choose to use the rate as:

At the beginning of the Period
At the end of the period
A weighted average for the period

Default value: At the beginning of the period.

Note: This block ‘Peg Rate options' is displayed only if ‘Exchange Rate' is selected as ‘Peg'.

The following provides some scenarios.

User selects the Peg Rate option for Base Currency -> Derived Curve Currency as = ‘Use Project Rate', and the curve configuration is successful (that is, ‘Derived Curve Currency' is listed in Project Rate with a pegged conversion rate).

The user then goes to Project Properties and changes the exchange rate for Base Currency -> Derived Curve Currency as ‘Float', and reopens the cash flow.

Because the curve has not been refreshed, the cash flow worksheet continues to show data as per previous value.

If user opens the ‘Derived' curve configuration window, the message, "Selected currency does not have pegged rate within project" appears.

If user refreshes the curve, then cash flow worksheet shows all values as zero as the curve configuration is no longer valid.

If user opens the ‘Derived' curve configuration window, the message, "Selected currency does not have pegged rate within project" appears.

In case Base currency ≠ Project Currency

User selects the Peg Rate option for Base Currency -> Derived Curve Currency as either of the three possible options,

Base Currency -> Project Currency is set as ‘Peg' in project properties. So there are no additional options to choose from, the curve configuration is successful

Then user goes to Project Properties and changes the exchange rate for Base Currency -> Project Currency as ‘Float'

Then reopens the cash flow

Because the curve has not been refreshed, the cash flow worksheet continues to show data as per previous value.

If user opens the ‘Derived' curve configuration window, the options for Base Currency -> Project currency appears, and the default value is selected as ‘At the beginning of the period'.

If user refreshes the curve, then cash flow worksheet values are refreshed as per the options for Base Currency -> Project Currency.

When user selects a currency to derive the curve, the system uses the data from source curve per period and convert it into the selected currency as per the float or peg exchange rate option as selected by user within curve definition:

If user chooses the ‘Float' option, the system uses the exchange rates as defined in Company Workspace > Standards & Libraries > Exchange Rates.

If the user chooses ‘Peg' option, exchange rate values should be as per user selection in the block ‘Peg Rate as'.

See following sections on how the derived curve should calculate its data per period.

Note: The user can select the currency to be same as source curve currency. In that case, the derived curve would be same as source curve, exchange rates would not apply.

Exchange Rate = Float (Rate at beginning of the period)

The user can select the Derived curve definition such that the exchange rate for currency conversion from source to destination is picked up from Company Workspace > Standards & Libraries in such a way that the Rate from the beginning of the period is used.

In other words, when doing the currency conversion, of all the available rates for a given period, the system selects the Rate closest to the beginning of the period.

Note: If more than one rate is defined for the same day, the system picks the latest rate on that day. If no exchange rate is available for a past date, the system uses zero.

Exchange Rate = Float (Rate at the end of the period)

The user can select the Derived curve definition such that if multiple exchange rates are available for a given period (month / year), the system uses the rate ‘At the end of the period'.

In other words, when doing the currency conversion, of all the available rates for a given period, the system selects the Rate closest to the end of the period.

Exchange Rate = Float (A weighted average for the period)

If the user chooses to apply the exchange rate as a weighted of all values for a given period (Exchange Rate = ‘Use a weighted average for the period'), then the value will be based on the number of days in a given month. That is, the total of all "Rate * No. of days it is applicable during the period" divided by "Total number of days within the period~" (~Month / Year).

When the Exchange Rate = ‘Float', Oracle recommends that the user set a ‘Refresh' frequency (Cost Manager > Cash Flow > Refresh drop-down > Set Frequency...), for the Derived curves, to cover the following scenarios:

Scenario 1

Future Exchange Rates from ‘Company Workspace > Standards & Libraries' can get changed with time. If ‘Derived' cash flow curve is not set to automatic refresh, it will continue to hold values as per older exchange rate values (unless manually opened & refreshed)

Scenario 2

The ‘Source Curve' might undergo a change in its configuration / values. If ‘Derived' cash flow curve is not set to automatic refresh, it will continue to hold values as per older source curve data (unless manually opened & refreshed).

Exchange Rate = Peg

This option means that the user does not want to use exchange rate as captured within Company Workspace > Standards & Libraries > Exchange Rates, but the user prefers to define the rate as one of the following:

Constant
Dynamic
Use Project Rate

If Constant:

To do the currency conversion (1.0 Base Currency = <constant value> Derived Curve currency), the system uses the constant value entered by the user.

The source curve defaults to be in Project currency. If Base Currency ≠ Project Currency, the system picks the exchange rate for Base Currency -> Project Currency from Project Properties and makes appropriate conversion to calculate the Derived curve in Derived Currency as selected by user.

If Base Currency -> Project Currency in Project properties is set as ‘Float', the system uses the option as selected by user for ‘Base Currency -> Project currency' conversion.

The system picks rates from Company Workspace > Standards & Libraries > Exchange Rates by using one of the following options selected by user:

At the beginning of the period
At the end of the period
A weighted average for the period

If Dynamic:

When rendering the curve, the system accesses the Data Element (DE) selected by the user and uses the value as the exchange rate to do conversion (1.0 Base Currency = <Selected DE value> Derived Curve currency).

If the DE value is blank/null (in source shell attribute form/single record BP), the system applies zero as the exchange rate.

If Base Currency ≠ Project Currency, the system does one of the following:

Picks the exchange rate for Base Currency -> Project Currency from Project Properties
Calculates the Derived curve (in Derived Currency) as selected by user.

If Use Project Rate:

The exchange rate is pegged as specified in the shell properties.

If Base Currency ≠ Project Currency, the system does one of the following:

Picks exchange rate for Base Currency -> Project Currency from Project Properties
Calculates the Derived curve (in Derived Currency) as selected by user.
Note: For Commitment type curves, user can flip the view between Project and Transaction currencies. The system calculates for Source Curve data -> Derived Curve data by taking the source data in Project currency.

When the Exchange Rate = ‘Peg', Oracle recommends that the user set a ‘Refresh' frequency (Cost Manager > Cash Flow > Refresh drop-down > Set Frequency...), for the Derived curves, to cover the following scenarios:

Scenario 1

Peg rates as defined in project properties might undergo a change. If ‘Derived' cash flow curve is not set to automatic refresh, it will continue to hold values as per older pegged exchange rate values (unless manually opened & refreshed).

Scenario 2

For all types of Cash flow families, the ‘Derived' curve values are always displayed in its currency, as selected by user in curve configuration window.

For Commitment type cash flow families, the user can choose to view the family curves in ‘Project' / ‘Transaction' currency.

In either case, the ‘Derived' curve renders in the currency, as selected by user for the ‘Derived' curve configuration window, regardless of whether the rate is ‘Float' or ‘Pegged'.

The following explains special scenarios related to the exchange rate.

Special Scenario 1

The user selects a ‘Source Curve' while configuring the ‘Derived' curve

Completes ‘Derived' curve configuration and clicks ‘OK'

Removes the ‘Source Curve' itself from the cash flow family definition.

In this scenario:

When the user opens the curve worksheet, the derived curve will render all values as zero, regardless of whether the cash flow family has been refreshed or not.

When the user opens the curve configuration window, the ‘Source Curve' drop-down continues to show original value. When the user clicks ‘OK', the message, "Invalid curve configuration" is displayed.

Special Scenario 2

The user selects the ‘Exchange Rate' as ‘Peg' > Peg as ‘Dynamic', and then chooses a data source DE from grandparent shell attributes.

The user completes ‘Derived' curve configuration and clicks 'OK'.

The user changes the location of shell in which the curve was defined.

In this scenario:

If the new parent is the same type of shell (or another shell having the data Source DE on its attribute form), then this is not an error scenario. The curve renders by using the Rate value from new location.

If, however, the new parent does not have the Data Source DE on its attribute form, then the curve configuration is invalid:

When the user opens the curve worksheet, the Derived curve renders all values as zero.

When the user opens the curve configuration window, the Data Source continues to show original value. When the user clicks ‘OK', the message, "Invalid curve configuration" is displayed.

Special Scenario 3

The user selects a ‘Source Curve' while configuring the ‘Derived' curve,

The user completes ‘Derived' curve configuration and clicks 'OK'.

The user removes the ‘Source Curve' Datasource from company Workspace Cash Flow Datasources definitions.

In this scenario:

When the user opens the curve worksheet, the Derived curve (as well as the source curve) renders all values as zero, regardless of whether the cash flow family has been refreshed or not.

When the user opens the Derived curve configuration window, the ‘Source Curve' drop-down shows original value, and when the user clicks ‘OK', the message, "Invalid curve configuration" is displayed.

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