Understanding Escalation Information

After you set up the escalation indices, you must use the Escalation Information program (P15016) to set up escalation information for each lease for which you generate escalation billings.

This table describes the escalation information that is required to generate the recurring escalation billing records:

Escalation Information	Description
Index	Specify an index by which to calculate the escalation and the base index amount. The system uses both index amounts to derive a rate, which it multiplies by a basis amount to calculate the escalation.
Bill codes	Specify the bill codes to use to retrieve amounts and to assign to the escalation billing records that the system generates in recurring billing: Bill Code - The system assigns the value in the Bill Code field (GLC) to the escalation billing records that it generates for catch-up billings. Estimated BRCD - The system uses the value in the Estimated BRCD field (BRCD) to retrieve the amounts from the estimated escalation recurring billings records to determine the amount of catch-up billing to generate, if any. The system also assigns this value to the escalation billing records that it generates for recurring billing, unless you specify to combine the escalation and rent amounts. Rent BRCD - The system uses the value in the Rent BRCD field (BRRT) to retrieve the annual amount to use as the original basis, unless you specify a value in the Original Basis field (BESA). Depending on the processing option settings of the Escalation Update Without Post program (R15152), the system might assign this bill code to the recurring billing record that it generates when you combine escalation and rent amounts.
Dates	Specify these dates: Effective dates for the escalation information (Begin Date and End Date fields). Effective dates for the base index (Base Start Month, Base Start Year, Base End Month, and Base End Year fields). Effective dates for generating the escalation amount (Next Month, Next Year, and Period Length fields). When you generate the escalation recurring billing record, the system updates these fields based on the billing frequency.
Computation method	Specify one of these computation methods: Direct (D) - The system retrieves the index amount based on the index code that you entered directly from the index table. Average (C) - The system uses an average of the index values for the term of the escalation billing period. For example, if the escalation term is 9/01 through 12/31 (four months), the system retrieves and sums the index amounts for the corresponding months, and then divides that result by the number of periods (four) to derive the average amount to use as the index amount. The system does not include missing or zero index values when it derives the average amount to use.
Basis amount	Specify the amount to use as the basis for the escalation. You can enter a value in the Original Basis field (BESA), use the annual rent amount from recurring billing, or use the escalated rent amount (the system adds the annual amounts for the rent and estimated bill codes).

You can also specify escalation limits and make adjustments to the index amount that the system uses and Porter Wage information.

The system stores escalation information in the Tenant Escalation Master table (F15016B).