Using a correction factor
If you are using a base amount indexation method or an indexation based on index groups, you can also specify a correction factor on the indexation percentage in the appropriate field at the Contract details > Contract lines step.
The calculated indexation percentage will be multiplied by the correction factor. The result of this calculation is used to index the amount in the contract line. For example, if the calculated indexation percentage is 3% and the specified correction factor is 60%, the amount will be indexed by 1.8%.
Example
Scenario 1: The calculated indexation percentage is 3.5 %. After the correction factor is applied, the indexation percentage is 2.80% (80% * 3.5% = 2.80 %). As this percentage lies below the minimum value, the amount in the contract line will be indexed by 3%.
Scenario 2: The calculated indexation percentage is 6.3%, which is above the maximum value. After the correction factor is applied, the indexation percentage is 5.04% (80% * 6.3% = 5.04 %). The amount in the contract line is indexed by this percentage.
Scenario 3: The calculated indexation percentage is 4.0%, which is above the minimum value and even after applying the correction factor it stays above the minimum. The amount in the contract line will be indexed by 3.2% (80% * 4% = 3.2%).
Scenario 4: The calculated indexation percentage is 8.0 %, which is above the maximum value specified. Even after applying the correction factor, it stays above the maximum value (8% * 80% = 6.4%). The amount in the contract line will be indexed based on the maximum value (= 6%).