STEM help / Calculation framework

Inputs beginning with ‘T’

Tangible

A choice governing the accounting classification of a Resource, and the corresponding aggregation of Net Fixed Assets to calculate results for Net Tangible Assets and Net Intangible Assets.

Yes: the Resource is classed as a tangible asset, i.e., a physical entity.

No: the Resource is an intangible asset, such as a capitalised licence fee.

Default: Yes.

Target Gearing

A prescription for the maximum relative proportion of debt to equity raised to satisfy the net funding requirement for a network.

Gearing = Debt/(Debt + Equity)

Default: Constant {0.5}. Equal proportions of debt and equity are raised.

Tariff Period

Defines a reference period for the Rental Tariff input (which is interpreted as tariff per tariff period, such as EUR per month or USD per annum). This indicates how the tariff input should then be scaled in proportion to the length of the current period for calculation.

Default: Year.

Tax Rate

The annual tax rate on the network Pre-Tax Profit.

All rates are specified as proportions, e.g., a tax rate of 30% is specified as 0.3.

Default: 0.0.

Tax Relief Regime

A choice of four different models for handling tax relief:

None: the Tax Rate is only applied to positive Pre-Tax Profit when calculating the Tax Charge, and no tax relief is available.

Immediate: the Tax Rate is applied to Pre-Tax Profit, even if negative, in which case there will be a negative Tax Charge. Such a charge – corresponding to a credit from the government – may be appropriate where the model represents only part of the organisation’s operations, and losses in the operation being modelled can be offset for tax purposes against profits in other operations.

Limited: losses are accumulated in years when Pre-Tax Profit is negative, for a maximum number of years specified by the input Tax Relief Years. In years when Pre-Tax Profit is positive, any remaining losses are offset against tax, starting with the oldest. A Tax Charge is only levied once all relief is exhausted.

Unlimited: losses are accumulated indefinitely when Pre-Tax Profit is negative, and offset against tax when Pre-Tax Profit is positive, as above.

Default: None.

Tax Relief Years

The maximum number of years for which losses can be accumulated when limited tax relief is available (i.e., input Tax Relief Regime = Limited).

Note: Tax relief is implemented as a series of derived results, supporting limited accumulation of losses for up to five years or unlimited accumulation indefinitely. If you need to accumulate losses for more than five years for limited tax relief, it is fairly straightforward to define the necessary additional results – see 5.17 Defining results.

Note: Only values in a period, governed by the input Tax Relief Years, up to and including year –1 will affect the calculations, even if the input Tax Relief Regime = Unlimited.

Default: 5. Any remaining loss from more than five years ago is discarded.

Term

The term of the debt facility in years.

Default: 0.

Time Factor

A choice as to whether an implicit time factor for the capacity should be inferred from the Capacity Period input:

No: no time factor is associated with the capacity.

Yes: a time factor is inferred so that in-time consumable capacity may be matched to instantaneous demand, or per-time persistent capacity may be matched to aggregate demand.

Default: No.

Time Lag

The number of years delay between the Input to a Time Lag Transformation and the corresponding Output.

The output in year n, zn, is calculated as:

zn = 0 for n < c

zn = xn–c for nc

where

x = Transformation input

c = Lag input

Default: 1.

Traffic Calculation

This pivotal input determines which inputs in this dialog will drive the calculations of results, and which will be ignored, as follows:

Volume Driven: the Busy Hour Traffic result is inferred from the (average) Traffic per Connection input, according to the stated Distribution parameters, and the Nominal Bandwidth per Connection and Contention Ratio inputs are ignored

Peak Driven: the Busy Hour Traffic result is calculated directly from the Nominal Bandwidth and Contention Ratio inputs, the Annual Traffic result is then inferred from the busy hour traffic, according to the stated Distribution parameters, and the Traffic per Connection input is ignored

Independent: used for some media services for which the peak traffic and traffic volume can be estimated directly without reference to the Distribution inputs which are ignored in this case.

In most cases, the Distribution parameters in this dialog allow the peak traffic to be inferred from the traffic volume, or vice versa; these contrasting approaches to the calculations are common choices for voice and data services, respectively.

Default: Volume Driven.

Traffic per Connection

The average traffic that each connection generates in a Traffic Period. This can be defined directly as a time series, or as a reference to a separate Transformation element.

For a data service (i.e., with Traffic Calculation set to Peak Driven) this input is ignored.

Default: Constant {1.0}. Each connection generates one unit of traffic per year.

Traffic Period

Defines a reference period for the Traffic per Connection input (which is interpreted as traffic per traffic period, such as Call Minutes per month or archive GBytes per annum). This indicates how the traffic per connection input should then be scaled in proportion to the length of the current period for calculation.

Default: Year.

Traffic Unit

The unit of traffic volume, e.g., Calls, Call Minutes, Mbit. Either type in a unit or choose from the drop-down list.

The selection has no mathematical effect on the model but the text is used to label the y-axis on results graphs.

Default: none.

Transformation

The Transformation from which the ‘size’ of a Transformation Input is derived, in conjunction with the Basis.

Default: none.

Transformation (2)

The name of a Transformation, selected from a list.

Note: these relationships are easily defined by dragging between the icons for the respective model elements – see Working with Links.

Default: <none>.

Type (1)

A choice of the type of Price List to be used for the Resource:

Overall Cost: the cost of the Resource is specified by the Price List as a cumulative total cost (1000, 1800, …)

Overall Unit Cost: the Price List specifies an overall unit cost (10, 9, …)

Overall Discount: the Price List specifies an overall discount factor (0.0, 0.1, …)

Stepped Unit Cost: the Price List specifies one unit cost x up to the first n units, and then a lower rate y up to the next breakpoint o.

Stepped Discount: the Price List specifies one discount factor y1 up to the first n units, and then a lower factor y2 up to the next breakpoint n2.

Default: Overall Cost.

Type (2)

For a Sensitivity, this input controls how the value of a parameter is increased or decreased. By default, this change is calculated as a Proportion of the original value (by default 1%). By setting Type to Delta you can vary the value by a specified fixed amount (for example 10,000), or you can define the Absolute maximum or minimum values that the parameter will take.

See 9.4 Using sensitivities to identify critical model assumptions.

Default: Proportion.

 

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