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| Upon a Termination Event under the {{isdama}} it is good to have your payment and calculation methods well-defined. The section {{isda92prov|Payments on Early Termination}} ({{isdama}} Section {{isda92prov|6(e)}} and Schedule 1(f)) covers this.
| | {{isda 6(e)(i) summ|isda92prov}} |
| ==={{isda92prov|First Method}}===
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| {{first method}}
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| ==={{isda92prov|Second Method}}===
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| The '''{{isda92prov|Second Method}}''' is a method of determining the {{isda92prov|Early Termination Amount}} due upon close out of an {{1992ma}}. Unlike the {{isda92prov|First Method}}, it requires a payment to be made equal to the net value of the {{isda92prov|Terminated Transactions}} to whom it is due, regardless whether it is the {{isda92prov|Defaulting Party}} or the {{isda92prov|Non-defaulting party}}. I.e., the Defaulting Party might get paid. Nice, huh?
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| ===Transaction Valuation===
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| The {{199ma}} provides alternative ways of arriving at a value for your portfolio of {{isda92prov|Terminated Transactions}}. This probably seemed like a good idea to {{icds}} at the time — hey look: [[acid wash denim]] seemed a good idea at the time, to ''someone'' — but it leads to complexity, confusion, fear and loathing.
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| *'''{{isda92prov|Market Quotation}}''' requires at least three arm’s length quotations to value the {{isda92prov|Transactions}} to be terminated. Since the {{isda92prov|Reference Market-makers}} won’t know anything about the state of your {{isda92prov|Transaction}}s — and you are hardly likely to tell them — they can hardly be expected to factor your specific {{isda92prov|Unpaid Amounts}} into their quotations, so their quotations, if they even give you one,<ref>They won’t.</ref> will be to replace the remainder of the Transaction ''in the abstract'', assuming all past payments have been made, and there are no {{isda92prov|Unpaid Amounts}}. Therefore, later on in your close-out calculation process, you will have to factor in those {{isda92prov|Unpaid Amounts}} yourself.
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| *'''{{isda92prov|Loss}}''' allows the {{isda92prov|Non-defaulting Party}} to figure out (in "[[good faith]]") its losses and costs (minus its gains) replacing {{isda92prov|Terminated Transactions}}. While the NDP ''can'' to this by reference to dealer quotations, it doesn’t have to. Seeing as, unlike a {{isda92prov|Reference Market-maker}}, the {{isda92prov|NDP}} itself absolutely ''does'' know what the {{isda92prov|Unpaid Amounts}} are, {{icds}} thought it easier for the {{isda92prov|Loss}} calculation method to factor the {{isda92prov|Unpaid Amounts}} in right away, rather than doing that as a separate second step, as per {{isda92prov|Market Quotation}}. But this really just confuses things, when it could have all been simple.<ref>The {{2002ma}} and its {{isdaprov|Close-out Amount}} recognises that.</ref>
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