Fluctuations, 1st edition

This document was reissued in November 2024 as practice information. It had previously been published in August 2016 as a guidance note. The regulatory requirements remain the same and no material changes have been made to the document. For more information on the document category changes, see Upholding professional standards.

This  practice information outlines different fluctuating price mechanisms for use in contracts, selection of appropriate mechanisms for particular situations and techniques for calculating adjustments.

Main topics include:

• an introduction to fluctuating price.
  
• general principles (Level 1: Knowing).
  
• fluctuations in different types of contracts.
  
• types of fluctuations.
  
• calculation of increased costs due to delay and allocation of responsibility.
  
• changes in costs due to currency exchange rates.
  
• practical application (Level 2: Doing).
  
• practical considerations (Level 3: Doing/Advising).
• choosing the contract.
• factors to consider and
  
• choice of indices and selecting the appropriate method of calculating fluctuations.