Overview of Amortization Rules

Bill Amount and Amortized Amount

For details, see What Are the Differences Between Bill Amount and Amortized Amount?

Pay-per-Use Resources

Before June 1, 2021, pay-per-use expenditures were not amortized. Instead, they were recorded for the transaction day.

Pay-per-use expenditures generated as of June 1, 2021 are amortized based on the usage.

• If the time when a pay-per-use resource started being used (the first time expenditures were generated) and the transaction time (when the amount due was paid) are in the same billing cycle, the amortized cost is recorded for the day when it started being used.
  • Example scenario: Suppose you used a pay-per-use resource from June 10, 2021 23:00:00 to June 10, 2021 23:59:59, the transaction time was June 11, 2021 00:53:30, and the amount due was $2 USD.

    Cost amortization: As the time when expenditures were generated (June 10, 2021 23:00:00) and the transaction time (June 11, 2021 00:53:30) were in the same billing cycle, the amount due ($2 USD) was recorded as the amortized cost for June 10, 2021.

• If the time when a pay-per-use resource started being used (the first time expenditures were generated) and the transaction time (when the amount due was paid) are not in the same billing cycle, the amortized cost is recorded for the transaction day.
  • Example scenario: Suppose you used a pay-per-use resource from June 30, 2021 23:00:00 to June 30, 2021 23:59:59, the transaction time was July 1, 2021 00:53:30, and the amount due was $2 USD.

    Cost amortization: As the time when expenditures were generated (June 30, 2021 23:00:00) and the transaction time (July 1, 2021 00:53:30) were not in the same billing cycle, the amount due ($2 USD) was recorded as the amortized cost for July 1, 2021.

Pay-per-use expenditures generated as of September 1, 2024 are amortized based on the following rules:

• If the period from a pay-per-use resource started being used to the resource stopped being used (the period from the billing was started to the billing was ended) and the transaction time are in the same billing cycle, the amortized cost is recorded for the day that includes the time one second before resource expiration.
  • Example scenario: Suppose you used a pay-per-use resource from September 10, 2024 23:10:01 to September 12, 2024 00:00:00, the transaction time was September 12, 2024 00:53:30, and the amount due was $2 USD.

    Cost amortization: As the resource expired at September 12, 2024 00:00:00 and one second before the expiration was September 11, 2024 23:59:59, the amount due $2 USD was recorded as the amortized cost for September 11, 2024.

• If the period from a pay-per-use resource started being used to the resource stopped being used (the period from the billing was started to the billing was ended) and the transaction time are not in the same billing cycle, there are two cases to consider: If the transaction time is earlier than October 01, 2024 23:59:59, the amortized cost is recorded for the day that includes the time one second before resource expiration. If the transaction time is later than October 01, 2024 23:59:59, the amortized cost is recorded for the billing cycle covering the transaction time.
  • Example scenario A: Suppose you used a pay-per-use resource from September 30, 2024 23:10:01 to September 30, 2024 23:59:59, the transaction time was October 01, 2024 00:53:30, and the amount due was $2 USD.

    Cost amortization A: As the transaction time (October 01, 2024 00:53:30) is earlier than October 01, 2024 23:59:59, the amount due ($2 USD) is recorded as the amortized cost for September 30, 2024.

  • Example scenario B: Suppose you used a pay-per-use resource from September 30, 2024 23:10:01 to September 30, 2024 23:59:59, the transaction time was October 02, 2024 00:53:30, and the amount due was $2 USD.

    Cost amortization B: As the transaction time (October 02, 2024 00:53:30) is later than October 01, 2024 23:59:59, the amount due ($2 USD) is recorded as the amortized cost for October 02, 2024.

Note:

• The amortized costs of pay-per-use resources involving account adjustments will be recorded for the historical billing cycle where account adjustments occurred.
• The costs of monthly-settled CDN (billed by traffic) can be amortized by domain name.
• For pay-per-use resources settled on a monthly basis (for example, CDN billed by 95th percentile bandwidth), the amortized cost is recorded when the bills are settled. This explains why there may be a peak in the middle of a month.

Yearly/Monthly Subscriptions and Reserved Instances

Starting from August 1, 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 1, 2023. For orders unsubscribed from before February 1, 2023 and their associated historical orders, the unallocated expenditures were recorded as amortized costs for February 1, 2023.

For refunds generated before February 1, 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 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 subscription	2	2	56	-	-	-	...	-
  Amortized cost for unsubscription	-	-	-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 1 to January 30) at $60 USD, renewed it for one month at $60 USD on January 5, 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 subscription	2	2	2	2	2	2	...	2	2	2
  Amortized cost for renewal	-	-	-	-	-	-	-	60	-	-
  Amortized cost for unsubscription from renewal period	-	-	-	-	-	-	-	-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 1 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 1	January 2	January 3	January 4	January 5	January 6	...	January 28	January 29	January 30
  Amortized cost for subscription	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 the price of $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.

Enterprise Projects and Tags for Amortized Costs

Yearly/Monthly Subscriptions

• Enterprise project: By default, the enterprise project selected for the order is used for amortized costs of your yearly/monthly subscription.
• Tags: Starting from June 1, 2021, the resource tags used when the amortized costs are calculated are applied to the daily amortized costs of your yearly/monthly subscriptions. Tags for costs amortized before June 1, 2021 do not change even if the tags for their resources change.

Pay-per-Use Resources

The enterprise project and cost tags used when pay-per-use resources are settled are used for your amortized costs.

Example

If you purchased a yearly/monthly subscription (valid from January 1, 2021 to February 1, 2021) at the price of $3.5 USD, and then unsubscribed from it on January 13, 2021 and paid a handling fee of $0.35 USD, the total cost would be $3.5 USD, the validity period would be 32 days, and the daily amortized cost would be $0.109375 USD (3.5/32 = 0.109375).

You will see two amortized cost records for January 2021.

• One for the total cost of $3.390625 USD to be amortized over the period from January 1, 2021 to January 31, 2021.
• The other for the cost to be amortized for the remaining days after unsubscription ($-1.7385 USD). The total cost from January 1, 2021 to January 13, 2021 (the unsubscription day) is $1.32 USD, the handling fee is $0.35 USD, and the actual refund amount is $1.83 USD (3.5 - 1.32 - 0.35 = 1.83). The amortized cost for the remaining days after unsubscription in January is $1.7385 USD (1.83/20 x 19 = 1.7385).