Amortization Rules for Yearly/Monthly Subscriptions

Starting from August 01, 2020 00:00:00, the following cost amortization rules apply to new expenditures:

Expenditures

Expenditures involve the following bill types: Expenditure-purchase, Expenditure-renewal, and Expenditure-change.

• Daily amortized cost = Order amount/Number of days from the effective time to the expiration time
• If the resources in an order are not enabled, their costs will not be amortized. Amortized costs do not include the cost of order subscription and the cost of the orders that were automatically unsubscribed from when resources could not be enabled.
• If the order takes effect and expires on the same day, its costs will not be amortized. Instead, they will be recorded for that day.
• If a subscription is renewed but the order effective time has elapsed, the historical costs will still be amortized over the period the order was effective.

Refunds

The following cost amortization rules only apply to refunds generated since February 01, 2023. For orders unsubscribed from before February 01, 2023 and their associated historical orders, the unallocated expenditures were recorded as amortized costs for February 01, 2023.

For refunds generated before February 01, 2023, if the effective time has passed, the cost incurred during the elapsed days is recorded as amortized cost for the unsubscription day, and the unallocated expenditures will be amortized on a daily basis in the remaining days.

Refunds involve unsubscription from resources, unsubscription from renewal periods, and specification downgrade.

• Unsubscription from resources: After a resource is unsubscribed from, refunds and unallocated expenditures for all historical orders are recorded as amortized costs for the unsubscription day.

  Example: Suppose you purchase a 1-month subscription (from the 1st day to the 30th day) at the price of $60 USD, and the daily amortized cost is $2 USD. However, you request a refund of $56 USD on the 3rd day of the subscription month.

  Cost amortization: As the cost amortized over the first two days was $2 USD each day, the cost for the third day is $-56 USD, and no amount will be amortized for the remaining days from the 4th to the 30th.

  Order Line	1st Day	2nd Day	3rd Day	4th Day	5th Day	6th Day	...	30th Day
  Amortized cost for subscriptions	2	2	56	-	-	-	...	-
  Amortized cost for unsubscriptions	-	-	-56	-	-	-	...	-

• Unsubscription from renewal periods: Refund and unallocated expenditures for associated renewal orders are recorded as amortized costs for the unsubscription day.

  Example: Suppose you purchased a 1-month subscription (from January 01 to January 30) at $60 USD, renewed it for one month at $60 USD on January 05, and unsubscribed from the renewal period for $-60 USD on January 28.

  Cost amortization example:

  Order Line	1st Day	2nd Day	3rd Day	4th Day	5th Day	6th Day	...	28th Day	29th Day	30th Day
  Amortized cost for subscriptions	2	2	2	2	2	2	...	2	2	2
  Amortized cost for renewals	-	-	-	-	-	-	-	60	-	-
  Amortized cost for unsubscriptions from renewal periods	-	-	-	-	-	-	-	-60	-	-

• Specification downgrade: The expenditure generated before specification downgrade is recorded as amortized cost for the specification downgrade day, and the unallocated expenditures will be amortized for each day in the remaining days. Daily amortized cost = Refund of the specification downgrade order line/Number of days from the effective time to the expiration time

  Example: Suppose you purchase a 1-month subscription (from January 01 to January 30) at the price of $60 USD. On the 3rd day, $30 USD needs to be refunded for specification downgrade.

  Cost amortization example:

  Order Line	January 01	January 02	January 03	January 04	January 05	January 06	...	January 28	January 29	January 30
  Amortized cost for subscriptions	2	2	2	2	2	2	...	2	2	2
  Amortized cost for specification downgrade	-	-	-3	-1	-1	-1	...	-1	-1	-1

Account Adjustment

Any cost amortization that involves account adjustments will change the historical data.

Suppose you purchase a 1-month subscription (from the 1st day to the 30th day) at $60 USD. On the 3rd day, due to an error, Huawei Cloud needs to refund the order amount of $60 USD and you need to pay $66 USD.

In this case, as Huawei Cloud needs to return $60 USD first, the daily amortized cost is $2 USD; as you need to pay $66 USD, the daily amortized cost is $2.2 USD.