Incremental Calculations

Incremental calculations are the most efficient way to calculate average balances. Each time that the system processes ADB calculations, it extracts only the daily balances that have been posted since the last time that it ran the ADB Calculation process. The process uses the prior period averages as the starting point to calculate the current period's average.

The ADB incremental calculation method determines average balance by dividing the aggregate amount by the number of days within the requested period type:

Average balance equals the aggregate amount divided by the number of accumulated days in the requested period type.

Term	Definition
Aggregate Amount	The aggregate amount equals today's ending balance plus the previous aggregate amount (the aggregate amount for the previous day of this period). If it is the first day of a period, the aggregate amount is equal to the ending balance and the average balance.
Ending Balance Amount	The ending balance amount equals today's daily balance plus the previous ending balance (the ending balance of the previous day of this period). If it is the first day of a period, the ending balance is the same as the aggregate amount and the average balance.

Term

Definition

Aggregate Amount

The aggregate amount equals today's ending balance plus the previous aggregate amount (the aggregate amount for the previous day of this period).

If it is the first day of a period, the aggregate amount is equal to the ending balance and the average balance.

Ending Balance Amount

The ending balance amount equals today's daily balance plus the previous ending balance (the ending balance of the previous day of this period).

If it is the first day of a period, the ending balance is the same as the aggregate amount and the average balance.

The following two tables illustrate incremental calculation by showing how February 1 is calculated using two different time periods (period types): year to date and month to date.

This table shows how the system calculates February 1 for a YTD (year to date) period.

Incremental Calculation for YTD

The following table shows how the system performs incremental year to date calculations:

Year-to-Date Example: Incremental ADB Calculation

Year to date example: February 1 is the 32nd day of the period

Incremental Calculation for MTD

Month-to-date balances are maintained until the last day of the month. On the first day of the new month, the ending balance of the prior month is carried forward to the beginning of the new month and the aggregate balance starts over. MTD is for the month only and the calculation does not include any amounts from any other period.

The following table shows how the system calculates February 1 for a MTD (month to date) period:

Month-to-Date Example: Incremental ADB Calculation

Month to date example: February 1 is the first day of the second period