FDM.3:4.2 - Extract the terms that determine the events

Recover the event conditions and their consequences from the applicable arrangement. For each relevant event, establish who acts or pays, to whom, what amount or quantity is determined, in which currency and at what time. Include calculation, calendar, exercise, notice or settlement rules when they can change the answer.

Identify the state from which an event is evaluated. Outstanding principal, accrued amounts or a prior exercise can matter. Preserve the rule that updates this state after an event; an amount calculated from an outdated principal can be wrong even when its formula is correctly implemented.

Ask the responsible specialist about a missing or disputed term. A software default can represent an explicit modeling assumption, but it cannot silently establish the actual contract’s meaning.