TCV calculation for leap year.

[Jyoti_Sinha]

In a specific scenario, user is creating a quote with a start date of 28th Feb 2019 for annual charge and the TCV value is different if any other date in February is chosen. Please check below the solution section for further explanation.

[Jyoti_Sinha · Accepted solution]

Find below explanation on How TCV is calculated on Quote metrics for a leap year with above example.

MRR= 1895.8334

Calculation for the 11 months -> 1895.8334* 11 (months) = 20854.1674

Calculation for the last month - >(1895.8334/29 days(2020 is leap year)) * 28 Days = 1830.4598

Final TCV --> 20854.1674 + 1830.4598 = 22684.6272

This is happening because the "28/02/2018 - 27/02/2019" is not a full year in this case, when the term is 28/02/2019 - 27/02/2020. The full year in this case would be 28/02/2019 - 28/02/2020, because 2020 is a leap year.

[chris_curtis]

Hi Jyoti,

Do we need to do anything to prevent this?

i.e. will this cause any problems or pro-rated invoices next year?

Thanks

Chris

[Manojna]

In a specific scenario, start date is  2/28/2019, Initial term is 12

MRR= 156 and there is one time charge with price 25

Below is break down of calculation

TCV accounts to calculate based on month first

Calculation for the 11 months -> 156* 11 (months) =1716

Calculation for the last month - >(156/29 days(2020 is leap year)) * 28 Days = 150.62

TCV for recurring --> 1716+150.62 = 1866.62

TCV for one time = 25

Total TCV = 1866.62+25 = 1891.62 

Since the quote start date is 2/28, it is being prorated. If you would like to see full month instead of proration, it can be resolved by setting start date as March 1st