The price adjustment mechanism, under option X1.3 1st bullet, assumes that a compensation event is being priced at 'current rates', so is required to be 'backdated' to the Base Date. As this is a change to the Prices (Price List), it is adjusted so that the change amount is 'comparable with' the amounts in the Price List.
It does this by using the PAF calculated for the latest payment assessment, but applies the calculation in reverse, that is by dividing by 1 plus PAF.
The payment assessment (Price for Services Provided to Date) is adjusted under X1.4 which takes the applicable 'changed amount' from the Price List (interim value) and applies a PAF adjustment to reflect the point in time when this is assessed for payment.
Under X1.3 there is only one adjustment calculation, made at the time the compensation event is assessed. When this amount is included in a payment assessment, a PAF adjustment is applied at the time of the assessment.
It does this by using the PAF calculated for the latest payment assessment, but applies the calculation in reverse, that is by dividing by 1 plus PAF.
The payment assessment (Price for Services Provided to Date) is adjusted under X1.4 which takes the applicable 'changed amount' from the Price List (interim value) and applies a PAF adjustment to reflect the point in time when this is assessed for payment.
Under X1.3 there is only one adjustment calculation, made at the time the compensation event is assessed. When this amount is included in a payment assessment, a PAF adjustment is applied at the time of the assessment.