This is the currency the contract operates in and is mandatory. The statement to the IP owner would be presented in this currency. All accruals would be in this currency and all sales transactions would be converted to this currency before being stored. Payments to the creditors would be converted to their currency before the payments are made.

The Effective date is important and used to determine which transactions are to be included in the Royalty calculations.  Any sales and other applicable transactions prior to this effective date are not included in the Royalty calculations.  For example if a publisher has bought the rights from another publisher, liability for royalty payments only starts from a specific date.

This date is important for Returns Provisions processing.  For example if it is decided to take up a Returns Provision in the first and second Royalty Periods, the system needs to be able to determine what the first Period would be.

For a template, this field is usually left as 00/00/00 and when the Contract is created using a template, the actual date is entered.

The Contract Expiry Date is used to determine when royalties are no longer to be calculated.  Any sales and other applicable transactions after this date are not included in Royalty calculations.  Royalties are therefore no longer paid.

In a template, this date is usually left as 00/00/00 and when a Contract is created using a template, the actual expiry date is entered.

A Royalty cycle can start in any Financial Accounting Period.  The Financial Year and Royalty cycle do not have to have the same starting and ending periods.  The valid choices are: 0=use default month or 1-12=use this month.

If the Royalty cycle is the same as the Financial Year, enter 0.  A default Start of year can be set-up in TMSRY/SOY.  If this field is left blank or a 0 is entered, the default is used.

For example if the Start of year value is 1 (January) and the Royalties are paid every six months (Payment Frequency Code H) then Royalties are calculated for payment at the end of June and December.

Determines up to what period to take up Returns Provision.  This could be for the life of the book or typically it is for the first 6 months of sales which could be the first Royalty Period.  If it is for the first two Royalty Periods, enter 2.  Once the Provision has been taken up it must be decided how long to keep it before paying the author.  This is indicated in the No. of period to hold/No. prd for reversal field.  The Provision calculation is based on the total transaction quantity combined with the Provision Rate.  The Effective Contract Date is used to determine the start of the Royalty Periods for this Contract.

This is the period you want provisions to start.

If the returns provision is to be calculated as a percentage of the total royalty earned then select Rate. If it is flat amount then select Amount. Enter the percentage or the amount  and if returns provision is not being used then enter zero.

This determines how long to keep the Royalty money before paying it to the Author.  If the provision is to be kept for two Royalty periods, the entry would be 2.  This means the provision taken up in the first Royalty period is reversed in the third Royalty period.

This flag indicates if a successor to the IP owner is to be assigned.

Multiple Movement types may apply and their order of preference is determined through the use of the Sequence field.  When the Royalty calculation is performed it reviews each transaction detail and matches it to the Movement types in sequence to determine into which bucket the sales value must be posted.  If a transaction does not meet the criteria as defined for the first Movement type, the next Movement type is referred to, and so on.  If the sequence of Movement types is not set up correctly, a higher or lower sales value could be calculated resulting is a higher or lower royalty value being paid out.  If there are overlapping conditions in the Movement type definitions, the first bucket to meet the criteria is selected.

The sequence also defines the order in which the Movement type details print on the Royalties Statement.

This field identifies the Movement type applicable. When determining the Movement types, consider the sequence of the details on the Royalties Statement. Multiple Movement types may apply and their order of preference is determined through the use of the Sequence field.  If a transaction does not meet the criteria as defined for the first Movement type, the next Movement type is referred to, and so on. 

The sequence of Movement types would probably be high discounts and remainder sales and other special conditions and then normal sales. If there is no overlap in conditions the sequence is not as critical.

Royalties are probably not paid on certain Movement types where no profit is made, for example when stock is being offloaded as a Remainder sale.  If Sales and Returns are to be shown separately, two Movement types must be created.

The Price Basis code is required to define the unit price on which the royalties are to be calculated.  A Basis per Rise (number of copies) as well as a basis per Movement type can be entered. The Net Value is the RRP net of discount.

The Average Selling Price is similar to the RRP except the total value is divided by the total quantity to determine the Selling Price.

The United States uses code 4 Prevailing rate.  For export sales they use the current local Prevailing rate and nominate a Percentage of the local prevailing rate.  For example: 90%, as the export rate.

Code 5 Amount per Unit is a flat amount.

Code 6 Recommended Retail Prices less Tax is used by New Zealand as the GST is not to be included in the price.

The Stepped or Rising Royalties function allows for different Royalty Rates and Price bases to come into effect, based on predefined transaction quantities.

In order to calculate royalties the system uses the transaction quantity, combined with a given unit price and royalty rate.  If it is a flat rate, not dependent on the number of copies sold, these rises do not have to be completed

For example 10% royalties on the first 5000 copies sold and then 12% on the next 5000 copies sold.  The first 5000 is entered as the quantity for step 1 and the second 5000 is entered as the quantity for step 2, etc.  The various steps could be print runs and the quantities the number of copies printed in the print run.