# Calculation Logic (2026 onward)

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This article covers the calculation logic applicable to the 2026 onward reporting template.
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The EU Taxonomy dataset relies on consistent rules to transform raw company disclosures into complete, standardized metrics. Not every company reports every required data point, and disclosure practices vary widely. To address these gaps, Tracenable applies a clear accounting logic that respects the hierarchy of EU Taxonomy dimensions. This ensures that users always have a full, reliable set of metrics for each KPI and reporting year.

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## Hierarchical Structure of Dimensions

The EU Taxonomy dimensions are organized around two key hierarchies:

* *<mark style="color:$success;">**Level**</mark>* hierarchy
  * **Activity-level** – disclosure broken down by specific economic activities.
  * **Total-level** – aggregated across all activities of the company.
* *<mark style="color:$success;">**Eligibility Category**</mark>* (or Screening criteria) hierarchy
  * **Denominator**
    * **Eligible**
      * **Aligned**

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These hierarchies define the structure of the dataset. The accounting rules build on this structure to fill gaps, derive missing values, and ensure consistent reporting across companies.
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#### **A note on Denominator composition**&#x20;

In the older templates, the Denominator (A+B) could be fully decomposed: A+B = A + B, and A = A1 + A2, meaning every part of the denominator was explicitly accounted for.&#x20;

Under the 2026 onward template, this is no longer possible. The non-eligible (B) and eligible but not aligned (A2) categories are no longer standalone disclosures, and the non-material portion is reported only as an aggregated percentage without further breakdown. It is therefore unclear whether the non-material portion contains non-eligible activities or not. As a result, Tracenable does not attempt to derive or impute B, and the Denominator should not be assumed to decompose fully from reported figures alone.
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## What We Deliver

For each KPI (Turnover, CAPEX, OPEX), Tracenable delivers up to **five metrics** per company:

* `Eligible activity-level`
* `Aligned activity-level`
* `Eligible total`
* `Aligned total`
* `Denomintor`

Together, these metrics provide a complete view of a company’s reported and computed taxonomy performance under the 2026 onward framework.

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## Accounting Rules

Tracenable applies structured accounting rules to ensure that every KPI is complete, consistent, and reconcilable. These rules respect both the **Level hierarchy** (Activities → Total) and the **Eligibility Category hierarchy** (Aligned ⊂ Eligible ⊂ Denominator).

### <mark style="color:$info;">Rule 1: Compute Missing Parents from Children (Bottom Up)</mark>

Higher-level (parent) values are derived directly from their children. For example:

* *Total Eligible = Sum of Eligible activities*
* *Total Aligned = Sum of Aligned activities*

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This guarantees that roll-up values (e.g., totals) are always available, even when companies only disclose granular activity-level data. It ensures consistency across levels and prevents gaps in reporting.
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### <mark style="color:$info;">Rule 2: Compute or Infer Absolute Values</mark>

When only percentages (relative values) are disclosed, absolute values are computed from totals. For example:

* *Absolute Aligned activity = relative Aligned activity × absolute Denominator*
* *Absolute Total Aligned = relative Total Aligned × absolute Denominator*
* *Absolute Denominator = constituent absolute ÷ constituent relative*&#x20;

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This rule translates percentage-based disclosures into absolute figures, allowing users to compare across companies and sectors. It increases the analytical utility of the dataset by ensuring both relative and absolute values are available.
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#### **Takeaway**

By applying these rules, Tracenable ensures that the EU Taxonomy dataset is:

* **Complete** — every KPI has totals and activity-level values, even when disclosures are partial.
* **Consistent** — activity-level and total-level values always reconcile within the reported hierarchy.
* **Comparable** — disclosures are normalized into the same structure across companies and reporting years.
* **Traceable** — all computed values remain anchored in reported data, ensuring audit-grade reliability.

Where the framework itself introduces ambiguity, such as the composition of the Denominator, Tracenable preserves that ambiguity transparently rather than masking it with assumptions.
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