Proration Due to Billing Cycle Termination

You can configure the period termination proration policy in product offers to define how the refund of recurring charges and forfeiture of recurring grants is calculated with the following properties:

• Charge Period Termination Proration Type — To define how to prorate a refund when a period is terminated due to a billing cycle change, set one of the following values:

  • Refund Prorated Amount — The charge amount that is refunded is scaled according to the new billing cycle.
  • Refund Full Amount — The full charge amount is refunded.
  • Refund Nothing — No charges are refunded.
• Grant Period Termination Proration Type — To define how to prorate a forfeiture when a period is terminated due to a billing cycle change, set one of the following values:

  • Forfeit Prorated Amount — The grant amount that is forfeited for the terminated cycle is inversely scaled according to the new billing cycle.
  • Forfeit Full Amount — Any unused amount of the granted assets are forfeited.
  • Forfeit Nothing — Forfeit no granted assets.

The Refund Prorated Amount and Forfeit Prorated Amount options are calculated the same way as for purchase proration. The ratio of the number of granular units the product offer owns (inclusive of the purchase day or seconds) to the total number of granular units in the cycle is multiplied by the total amount. This result is then subtracted from the total amount to determine how much to refund or forfeit:

Prorated amount = (number of granular units owned ÷ number of granular units in the cycle) × total amount 
Refunded amount = total amount – prorated amount