best practice spreadsheet modelling standards v4.1

8/6/2019 Best Practice Spreadsheet Modelling Standards v4.1

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Best PracticeSpreadsheet Modelling Standards

SSRBS readsheet Standards Review Board

Developed and maintained by Spreadsheet Standards Review Board Ltd

Version

4.1


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www.ssrb.org

BEST PRACTICE SPREADSHEET MODELLING STANDARDS - VERSION 4.1

This document is a copy of the authorised version of the Best Practice Spreadsheet ModellingStandards as at 1 October 2005. Please check www.ssrb.org for any updates to this document.This document is subject to an Open Licence Agreement available at www.ssrb.org, a copy of

which is annexed to these Standards. All copyright in this document and any derivation of thisdocument is owned by Spreadsheet Standards Review Board Ltd (SSRB). Please see page 67for a copy of the Open Licence Agreement.

Printed and bound (if hard copy) in Australia.Copyright Spreadsheet Standards Review Board Ltd.

This is a SSRB Publication. These Standards are the subject of ongoing development withupdates being made available at www.ssrb.org.

SPREADSHEET STANDARDS REVIEW BOARD

The SSRB is the independent body that owns, develops and maintains the Best PracticeSpreadsheet Modelling Standards. The SSRB was established by BPM Analytical EmpowermentPty Ltd to bring together the best spreadsheet modelling skills from around the world in orderto develop and gain general acceptance for comprehensive and universally applicable BestPractice Spreadsheet Modelling Standards. The SSRB is responsible for:

promoting the general acceptance of the Best Practice Spreadsheet Modelling Standardsto ensure that the Best Practice Spreadsheet Modelling Standards are recognised, usedand accepted as the highest professional spreadsheet modelling standards in the world;

developing and maintaining the Best Practice Spreadsheet Modelling Standards; facilitating and managing public participation in the Best Practice Spreadsheet Modelling

Standards via either membership on the SSRB or written proposals to the SSRB;

evaluating proposals to modify the Best Practice Spreadsheet Modelling Standards; and providing free copies of the Best Practice Spreadsheet Modelling Standards to the public.

Please see page 16 or use the following contact details if you have any enquiries about the BestPractice Spreadsheet Modelling Standards or the SSRB:

Address: Spreadsheet Standards Review BoardLevel 8, 330 Collins StreetMelbourne, Victoria 3000

Australia

Telephone: +613 9244 9800Email: [email protected]: www.ssrb.org

IMPORTANT NOTICE

These Best Practice Spreadsheet Modelling Standards have been written based on spreadsheetmodelling using Microsoft Excel and are universally applicable to all forms of spreadsheetmodelling within that application.

The SSRB is of the opinion that Microsoft Excel is the most commonly used spreadsheetapplication available for spreadsheet modelling. Therefore, the commentary and examples

provided are based on Microsoft Excel. However, most of these standards and conventionsare also applicable to other spreadsheet applications.


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Table of Contents

Version 4.1 www.ssrb.org Page 1 of 74

Table of ContentsChapter 1. Introducing the Standards & Conventions............................................ 3

1.1. Defining Spreadsheet Modelling...........................................................31.2. The Evolution of Spreadsheet Modelling ...............................................31.3. Model Developers vs Model Users ........................................................31.4. The Need for Standards & Conventions ................................................41.5. Objectives of the Standards & Conventions...........................................41.6. Classification of the Standards & Conventions.......................................5

Chapter 2. Introducing the Spreadsheet Standards Review Board........................72.1. SSRB & The Best Practice Spreadsheet Modelling Standards ..................72.2. Role of the SSRB................................................................................72.3. SSRB Membership Categories..............................................................82.4. SSRB Membership Criteria...................................................................92.5. Changes to the Standards & Conventions Process ............................ 102.6. Changes to the Standards & Conventions Approval Criteria ...............11

Chapter 3. Using the Standards & Conventions.................................................... 133.1. Spreadsheet Modelling Areas.............................................................133.2. Structure of the Standards & Conventions ..........................................143.3. How to read the Standards & Conventions..........................................153.4. How to use the Standards & Conventions ...........................................163.5. More Information.............................................................................163.6. Fundamental Terms..........................................................................17

Chapter 4. Standards & Conventions....................................................................194.1. Overview.........................................................................................19 4.2. Best Practice Spreadsheet Modelling Standards...................................204.3. Best Practice Spreadsheet Modelling Conventions................................35

Appendix 1. Defined Words & Terms ......................................................................49Appendix 2. Standards Listing ................................................................................ 59Appendix 3.

Conventions Listing.............................................................................63

Appendix 4. Open Licence Agreement ....................................................................67


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Introduction


Chapter 1.Introducing the Standards & Conventions

1.1. Defining Spreadsheet ModellingThe term spreadsheet modelling is a generic term that is used to describe any form of analysiswhich is undertaken using spreadsheets. Spreadsheet modelling is also commonly referred toas financial modelling or simply modelling.

Aspreadsheet can be defined as:

A program for organising numerical data in tabular formats allowing rapid calculations withchanging variables.

Aspreadsheet model can be defined as:

A theoretical construct in a spreadsheet that represents numerical processes by a set ofvariables and a set of logical and quantitative relationships between them.

1.2. The Evolution of Spreadsheet ModellingSpreadsheet modelling is a relatively new area of expertise within the business world.

Functional spreadsheet applications were first developed in the 1980s with the release of Lotus1-2-3. Microsoft Excel for Windows was released in 1987 but it was not until the release ofMicrosoft Excel 95 that spreadsheet applications became widely used within the businessworld. Since the release of Microsoft Excel 95, spreadsheet application functionality hasimproved at an exponential rate, providing spreadsheet model developers with the tools toconstruct increasingly sophisticated spreadsheet models.

With the rise of spreadsheet application technology, both simple and complex spreadsheetmodels have become more prevalent throughout the business world. Spreadsheets are nowgenerally accepted as being the primary vehicle for modelling in business.

The demand for spreadsheet modelling continues to rise, with decision makers relying moreintensively on spreadsheet modelling analysis as the basis for their decisions. In order to meet

the increasingly complex demands of model users, model developers have had to significantlyimprove their spreadsheet modelling skills. As such, spreadsheet model development hasbecome a highly skilled area of expertise within the business community.

1.3. Model Developers vs Model UsersThe people who come into contact with spreadsheet models can be universally categorised asbeing either model developers or model users. To explain the Best Practice SpreadsheetModelling Standards it is important to clearly distinguish between model developers and modelusers.

Model Developers are involved in the physical construction of a spreadsheet model andthe derivation of the underlying calculations


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Model Users rely upon output from a spreadsheet model for various purposes, often toanalyse or gain an understanding of the area being modelled or to provide them withassistance in decision making

A model developer can act as a model user following the completion of a spreadsheet model.

Conversely, a model user can act as a model developer where they make changes to theconstruction of a spreadsheet model. Most people, including model auditors or modelreviewers, will be considered to be model users unless they are making changes to theconstruction of a spreadsheet model. The important difference between a model developer anda model user is the purpose of their involvement in the spreadsheet model, being to eitherconstruct or use the spreadsheet model.

1.4. The Need for Standards & ConventionsAs spreadsheet modelling activities and underlying organisations grow and become morecomplex, the need for universal spreadsheet modelling standards and accountability behinddecision-making processes also grows.

Traditionally, a lack of generally accepted principles governing the model development processhas resulted in model developers constructing models according to individual tastes andpreferences. This lack of standardisation has often resulted in unnecessary frustration andconfusion as model developers have difficulty understanding and utilising models developed byothers and model users have been forced to adapt to models on a case by case basis. In theabsence of universal spreadsheet modelling standards the spreadsheet modelling sector wouldcontinue to become more complex, disjointed and difficult for management and decisionmakers to control, unnecessarily creating significant costs and risks for business organisations.

Standards currently govern many areas of the business world. Some of the more prominentexamples include accounting standards and auditing standards. In general, there isconsiderable standardisation of reporting and analysis in relation to historical results, but very

little standardisation in relation to forecasted results. Prior to the first release of these BestPractice Spreadsheet Modelling Standards, there was little or no standardisation within thespreadsheet modelling sector. Despite this lack of standardisation, spreadsheet models havestill been used as a fundamental component of the quantitative analysis which is undertaken inrelation to almost every major business decision.

1.5. Objectives of the Standards & ConventionsThe Best Practice Spreadsheet Modelling Standards and Conventions aim to provide the modeldevelopment and business communities with:

freely available, universally applicable and definitive principles against which the qualityof spreadsheet models can be assessed; and

a platform for the standardisation of spreadsheet model development processes.Importantly, these Standards and Conventions provide a comprehensive and detailed set ofguidelines relating to every stage of the spreadsheet model development process, but do notlimit the customisability of spreadsheet-based analysis in any way. Put simply, these Standardsand Conventions explain how to develop best practice spreadsheet models, not what toinclude in spreadsheet models.

The Best Practice Spreadsheet Modelling Standards and Conventions empower both modeldevelopers and model users with the knowledge to improve the quality and efficiency ofspreadsheet modelling activities. In this regard, the primary spreadsheet modelling benefits of

adopting these Standards and Conventions are:


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a) Improved quality & transparencyb) Decreased development time & costc) Minimisation of error riskd) Facilitation of efficient sharing of model development methodologiese) Prevention of model redundancyf) Alignment of the needs of model developers & model users

1.6. Classification of the Standards & ConventionsThe following definitions govern the categorisation of the Best Practice Modelling Standards andConventions:

Best Practice Modelling Standard (BPMS):

A methodology or approach that is required to implement best practice spreadsheetmodelling.

The Standards are universally applicable and are the best way to develop best practicespreadsheet models. Standards must be exhaustive and must be recognised as being theonly methodology or approach that is best practice.

Best Practice Modelling Convention (BPMC):

A methodology or approach that is recommended to implement best practicespreadsheet modelling.

The Conventions are universally applicable and are recommended by the SpreadsheetStandards Review Board.

There are typically three types of Conventions:

1. Where there is more than one best practice, none of which are necessarilybetter or worse than the others (eg when aesthetics or personal preference can notbe avoided);

2. Where a basis for consistency is required and there is no generally acceptedmethodology or approach in existence, the SSRB may recommend a Conventionto establish a basis for further standardisation; or

3. Where a methodology or approach is almost always best practice, but whencertain rare circumstances are introduced may not be best practice (ie where theSSRB considers the benefits from introducing the Convention for most spreadsheetsthat considerably outweigh the lack of universal applicability).


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Chapter 2.Introducing the Spreadsheet Standards Review Board

2.1. SSRB & The Best Practice Spreadsheet Modelling StandardsThe Spreadsheet Standards Review Board (SSRB) is the independent body that develops andmaintains the Best Practice Spreadsheet Modelling Standards. The SSRB has investedsignificant resources in comprehensively analysing every aspect of spreadsheet modelling inorder to establish these comprehensive and universally applicable Standards.

The SSRB was established by BPM Analytical Empowerment Pty Ltd to bring together the bestspreadsheet modelling skills from around the world in order to develop and gain generalacceptance for comprehensive and universally applicable Best Practice Spreadsheet ModellingStandards.

The Best Practice Spreadsheet Modelling Standards, being the highest professional spreadsheetmodelling standards publicly available in the world, were first published in July 2003 and havebeen progressively gaining general market acceptance.

2.2. Role of the SSRBThe SSRB is responsible for:

promoting the general acceptance of the Best Practice Spreadsheet Modelling Standardsto ensure that the Best Practice Spreadsheet Modelling Standards are recognised, usedand accepted as the highest professional spreadsheet modelling standards in the world;

developing and maintaining the Best Practice Spreadsheet Modelling Standards; facilitating and managing public participation in the Best Practice Spreadsheet Modelling

Standards via either membership on the SSRB or written proposals to the SSRB;

evaluating proposals to modify the Best Practice Spreadsheet Modelling Standards; and providing free copies of the Best Practice Spreadsheet Modelling Standards to the public.

The SSRB meets periodically to evaluate and consider proposals to add, delete or modify theStandards that are submitted to the SSRB by any party. The SSRB also invests significantresources into comprehensively analysing every aspect of spreadsheet development,maintenance and usage in order to establish new universally applicable Standards andConventions for spreadsheet modelling activities.


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2.3. SSRB Membership CategoriesAny organisation or individual may apply to become a member of the Spreadsheet Standards

Review Board ("SSRB"). There are three categories of membership with the SSRB that anorganisation or individual can apply for:

Full Membership; Affiliate Membership; or Educational Membership.

The benefits associated with each type of membership are set out in the table below.

Full Membership Affiliate or Educational Membership

Best Practice Spreadsheet Modelling StandardProposal voting rights

Participation in all SSRB decision making Participation at bi-annual SSRB meeting Interests represented to policymakers and peak

organisations

Free SSRB News & Reports Free SSRB Website Link Free access to SSRB Resources Full Marketing Rights SSRB Conferences and Functions

Participation in Best Practice Spreadsheet ModellingStandards Proposals

Pre-release Best Practice Spreadsheet ModellingStandard changes consultation

Free SSRB News & Reports Limited Marketing Rights SSRB Conferences and Functions


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2.4. SSRB Membership CriteriaCertain criteria must be met by an organisation (or individual) prior to being considered for

membership with the SSRB. The criteria for the three different types of membership areprovided below:

Full Membership Criteria Affiliate or Educational Membership Criteria

1) ExperienceFull Members should have experience andability to exercise sound judgement in mattersthat relate to the current and long term needsand objectives of the SSRB that will contributepositively to the decision-making processes ofthe SSRB.

2) ReputationFull Members should have a reputation forintegrity, honesty and adherence to high ethicalstandards in the spreadsheet modelling sector.

3) CommitmentFull Members must have a commitment toparticipating in the industry for the long term.More specifically, the organisation mustundertake to make a NominatedRepresentative, as specified in membershipapplication, available to attend and participateeffectively in SSRB meetings.

4) Competency & Industry ParticipationFull Members are required to have certaincompetency levels as either model developersor model users as follows:

- Model Users: Minimum cost of $1m perannum from spreadsheet development; or

- Model Developers: Minimum revenues of $1mper annum from spreadsheet development.

5) No Conflicts of InterestFull Members should not have, or appear tohave, a conflict of interest that would impair themembers ability to represent the interests ofthe SSRB.

6) Use of the StandardsFull Members must have a commitment toapplying (both internally and externally) theBest Practice Spreadsheet Modelling Standardsin relation to spreadsheet development,maintenance and use.

1) ReputationAffiliate and Educational Members should havea reputation for integrity, honesty andadherence to high ethical standards in thespreadsheet modelling sector.

2) CommitmentAffiliate and Educational Members must have acommitment to participating in the industry forthe long term.

3) Competency & Industry ParticipationAffiliate Members are required to minimumcompetency levels as either model developersor model users.

4) No Conflicts of InterestAffiliate and Educational Members should nothave, or appear to have, a conflict of interestthat would impair the nominee's ability torepresent the interests of the SSRB.

5) Use of the StandardsAffiliate and Educational Members must have acommitment to applying (both internally andexternally) the Best Practice SpreadsheetModelling Standards in relation to spreadsheetdevelopment, maintenance and use.


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2.5. Changes to the Standards & Conventions ProcessThe Best Practice Spreadsheet Modelling Standards and Conventions are maintained by theSSRB in accordance with the Open Licence Agreement which is annexed to these Standards.

Any party may propose an addition, deletion or modification to the Standards by submitting a"Best Practice Spreadsheet Modelling Standards - Proposal Form" to the SSRB. Each proposal issubject to the same approval process. The process for approving a proposal is as follows:

1) Completion and submission of a "Best Practice Spreadsheet Modelling Standards ProposalForm" to the SSRB via [email protected] which requires the following categories ofinformation including (see "Standards & Conventions Approval Criteria" for more detailsin relation to these categories):

a) Submitting Party contact details;b) Submitting Party qualifications and experience;c) Type of proposal (addition, deletion or modification);d) Overview of proposal;e) Exact wording of Standard or Convention to be added, deleted or modified;f) Exact wording of new Standard or Convention to be added or modified;g) Summary of primary spreadsheet issues addressed by the proposal;h) Description of how the proposal complies with each of the eight "Criteria for

Approval"; and

i) Description of how the proposal meets the criteria for Standard or Convention"Classification.

2) Preliminary review of submission by SSRB Proposal Committee;3) Provision of Clarification Questions by SSRB Proposal Committee to Submitting Party (if

required);

4) Preparation of final submission by Submitting Party to SSRB;5) Dissemination of final submission to SSRB members (four weeks in advance of formal

SSRB Meeting or decision making vote);

6) Consideration and discussion of final submission at formal SSRB meeting; and7)Vote to approve submission proposal by SSRB members:

a) If approved by 75% of members - the Standard or Convention is added, deletedor modified for inclusion into the next version of the Best Practice SpreadsheetModelling Standards; or

b) If not approved by 75% of members - the proposal is not approved, and incertain cases a report may be prepared by the SSRB Proposal Committee to theSubmitting Party with suggested areas to address to gain future approvaland/or summary of the reasons why the proposal was not approved.


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2.6. Changes to the Standards & Conventions Approval CriteriaIn order for a Standard or Convention proposal to qualify for inclusion in the Best Practice

Spreadsheet Modelling Standards it must be approved by the Spreadsheet Standards ReviewBoard (SSRB). In evaluating proposals the SSRB focuses on eight fundamental criteria. Inorder to be approved by the SSRB the Standard or Convention proposal must:

1. be a methodology or approach for developing, maintaining or using spreadsheets;In order to be a Standard or Convention, the proposal under consideration must bea methodology or approach, and it must be such for the purposes of developing,maintaining or using spreadsheets. This ensures that proposals that are unrelatedto best practice spreadsheet modelling are not included in the Standards.

2. have universal applicability;When it is relevant, a Standard or Convention must be capable of being applied toevery Microsoft Excel spreadsheet (ie universally applicable).

3. address how to model (not what to model);All Standards and Conventions must be universally applicable methodologies orapproaches to spreadsheet development, maintenance and use. Hence, themethodologies or approaches that are adopted to develop, maintain or use specificspreadsheet content will not be considered to be Standards or Conventions.

4. be in the interests of improving communication between model developers and modelusers;

This criteria is directed at ensuring that the Standards are developed in the interestof improving communication, rather than reducing spreadsheet development time.This is due to the imperative that the Standards articulate best practices in order toencourage the spreadsheet market to develop the appropriate tools to assist them

with implementing the Standards.5. reduce the likelihood of errors or mistakes in spreadsheets;

One of the primary objectives of the Standards is to encourage practices that reducethe likelihood of errors occurring in the development, maintenance or use ofspreadsheets. As such, it is important that new Standards seek to reduce or at leastnot increase the likelihood of errors in spreadsheets.

6. increase spreadsheet transparency and user-friendliness for model users;By increasing transparency and user-friendliness, the ultimate end-users ofspreadsheets can achieve their goals in a more efficient, clear and logical manner.

7. be consistent with the definitions of words and terms contained in the Standards; andThere is an extensive list of definitions for words and terms used within theStandards and Conventions that must be read in conjunction with the Standards andConventions. As such any new Standard must be written such that it is consistentwith the definitions contained within the existing Standards.

8. be the best practice that is known, where best practice is defined as a set ofoperations achieving world class results in quality, flexibility, timeliness, cost andcompetitiveness, especially from the cooperation of model developers and model users;

The methodology or approach must be generally accepted as being the best practicethat is available or known at any point in time. In certain circumstances, particularlywhere a methodology or approach involves the inclusion of aesthetics, there may bemore than one best practice. In these circumstances a Convention may beestablished.


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Standards & Conventions


Chapter 3.

Using the Standards & Conventions

3.1. Spreadsheet Modelling AreasThe Best Practice Spreadsheet Modelling Standards and Conventions have been separated into16 Spreadsheet Modelling Areas. Each Spreadsheet Modelling Area represents a distinct areaof the spreadsheet model development process.

The number (1 to 16) of each Spreadsheet Modelling Area corresponds with the Chapter

numbers in the Best Practice Spreadsheet Modelling Standards Commentary & Examples book(see Page 16 for more details) where detailed commentary and examples have been providedin relation to each standard and convention.

The 16 Spreadsheet Modelling Areas are listed below:

Spreadsheet Modelling Area Brief Description

1 General Concepts Fundamental concepts including workbook, sheet andcell purpose and content.

2 Workbook Structure Workbook structure, sections, table of contents andnavigation.

3 Sheet Structure Sheet types, structure, consistency, titles and content.

4 Formats & Styles Format and style purpose, consistency, identification,explanation and appearance.

5 Assumption Entry Interfaces Assumption entry interface structure, rules,consistency, location and formats.

6 Sensitivity Analysis Sensitivity analysis structure, location, rules andidentification.

7 Outputs & Presentations Output links, rules, separation and sections.

8 Calculation Formulae Calculation formulae consistency, rules, diagrams andcomplexities.

9 Naming Principles Workbook, sheet and range naming consistency,identification, rules and application.

10 Time Series Analysis Time series analysis, assumptions, consistency,

structure, periodicity, rules and output.

11 Checks Error checks, Sensitivity checks and Alert checksstructure, rules, location, formats and identification.

12 Printing & Viewing Printing and viewing consistency, rules, margins,page numbers and information.

13 Multiple Workbooks Multiple workbook links, structure, location, rules anddiagrams.

14 Security & Protection Workbook, sheet and cell protection and control.

15 Visual Basic Programming The use of visual basic programming in spreadsheetmodels.

16 Miscellaneous Various other areas.


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3.2. Structure of the Standards & ConventionsThe following diagram provides an overview of the content of the Standards and Conventionswithin each of the 16 Spreadsheet Modelling Standards Areas. This diagram corresponds to thechapter and section names contained within the Best Practice Spreadsheet Standards

Commentary & Examples book (see Page 16 for details):

6. Sensitivity Analysis

7. Outputs & Presentations

8. Calculation Formulae

5.8 Inter face Example

3.6 Group ing Levels

3.7 Sample Sheet Layouts

5.7

4.1 Purpose-Based Formatting

Sheet Types

Sheet Type Component Summaries

4.4

4.5

5.5

5.6

10.3

13.3

4.2

4.3

3.1

3.8

8.4

8.3

16.2

13.1

13.2

4.6

5.1

10.4

10.5

14.4

3.4

3.5

10.2

Printed Information

12.1

12.2

12.3

12.4

Protection & Security

8.5

8.6 Circu lar References

9.1

9. Naming Principles

9.3

Overview10.1

Periodicity Labels

14.1

11.4

14.5

Emphasising Information

Help Files & Instructions

11.3

16. Miscellaneous

15.1 Overview

15.2

Error Checks

Error Checks Worksheets

Other Commentary

16.3

16.4

16.5

Styles

6.2

3.2

Workbook Navigation / Hyperlinks

3.3

7.4

8.1

8.2

Limiting Worksheet Depth

Window Panes & Splits

Workbook Consistency

Sheet Identification

Purpose-Based Workbook Structure

Viewing Workbooks

12. Printing & Viewing

13. Multiple Workbooks

14. Security & Protection

Multiple Workbook Issues

12.5

13.4

Model Import & Export Sheets

Multiple Workbook Diagrams

Printing Workbooks

Error & Sensitivity Indicating

Overview

Overview

Non-Assumptions Protection

15. Visual Basic Programming

Formula Presentation

Sheet Naming

Overview

Range Naming

Workbook Naming

11.5

Cell Classification

Cover Sheets

Sheet Consistency

6.7

7.1

7.2

7.3

5.4

Overview

The Interface Control Concept

Assumption Entry Interface Rules

5.2

5.3

Formula Consistency

6.1

Work in Progress Identification

Hyperlink Formatting

Data Identification

Data Alignment

9.2

9.4

Purpose-Based Formatting

Cell Identification

Assumptions Classification

Sheet Classification

Purpose-Based Sheet Structure

2.2

2.1

1.6

1.7

2.4

2.5

Overview

Page Numbers

Clarity of Purpose

3. Sheet Structure

4. Formats & Styles

1.1

1.2

1.3

1.4

2.3 Workbook Sections

2. Workbook Structure

1.5

Output Segregation

Output Formula Links

Output Worksheet Layout

Overview

Sensitivity Checks Worksheet

Sensitivity Check Identifiers

Input vs. Output Based Sensitivities

Overview

Workbook Protection

Sheet Protection

Passwords

14.2

14.3

Controls / Forms

Data Validation

Conditional Formatting

Time Series Assumptions

Multiple Periodicities

Time Series Workbook Consistency

Error Check Identifiers

Overview11.1

11.2

1. General Concepts

5. Assumption Entry Interfaces

10. Time Series Analysis

11. Error Checks

Complex Formulae

Calculation Segregation

Overview

Interface Rules

Sensitivity Outputs

Sensitivity Checks

6.3

6.4

6.5

6.6

Calculation Methodology

Recording Macros

16.1 Multiple Model Developers

1. General Concepts


3. Sheet Structure

4. Formats & Styles







11. Error Checks




16. Miscellaneous



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3.3. How to read the Standards & ConventionsAs mentioned above, the Standards and Conventions have been separated into 16 numbered

Spreadsheet Modelling Areas. Each of these Spreadsheet Modelling Area numbers correspondswith a Chapter number in the Best Practice Spreadsheet Modelling Standards and Commentarybook, where detailed commentary and examples are provided for each Standard andConvention.

The Standards and Conventions are available in two forms, as follows:

a) This book: Best Practice Spreadsheet Modelling Standards (no commentary orexamples); and

b) Best Practice Spreadsheet Modelling Standards - Commentary & Examples book: TheBest Practice Spreadsheet Modelling Standards plus 16 Chapters (corresponding to the 16Spreadsheet Modelling Standards Areas) including detailed commentary and examples for

each Standard and Convention.

Each Best Practice Spreadsheet Modelling Standard has a numbered identifier that includes aBPMS prefix (indicating that it is a Standard) and a two part number representing theSpreadsheet Modelling Area and number of the standard.

Similarly, each Best Practice Spreadsheet Modelling Convention also has a numbered identifierthat includes a BPMC prefix (indicating that it is a Convention) and a two part numberrepresenting the Spreadsheet Modelling Area and number of the convention. See thefollowing two numbered identifier examples:

Type Numbered Identifier Number Component Meanings

Standard BPMS 1-9 1 = Spreadsheet ModellingArea Number 1 (GeneralConcepts)

9 = Standard number 9within Spreadsheet ModellingArea Number 1

Convention BPMC 3-12 3 = Spreadsheet ModellingArea Number 3 (SheetStructure)

12 = Convention number 12within Spreadsheet ModellingArea Number 3

There are many defined words and terms contained within the text of many Standards andConventions. The definitions for each are contained in Appendix 1. These defined words andterms are highlighted within the text using italic font. An example is shown in the Standardbelow, with the italic font representing defined terms for workbook, format and style:

BPMS 4-1 Formats & Styles Key

Every workbookshould contain a key or legend that explains the purpose of each formatandstylethat has been applied to the cellsin the workbook.

The Best Practice Spreadsheet Modelling Standards (without commentary or examples)containing all of the Standards and Conventions within the 16 Spreadsheet Modelling Areashave been provided on pages 20 to 47 of this book.


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3.6. Fundamental TermsThere are several basic and fundamental terms that are used throughout the Standards and

Conventions. In addition to the basic terms outlined below, there is a detailed Appendix ofdefined words and terms on Page 49 of this book.

Term Definition

Assumption Anything within a workbook that the model developer intends to be manipulated by modelusers to affect the workbook calculations.

Base Assumption A base entry into a workbook that drives base outputs (output that does not include theimpacts of sensitivity assumptions).

Cell (Range) One (or more) of the entry boxes that make up worksheets within a workbook.

Column A single vertical group of cells which is 1 cell in width, and is the height of an entireworksheet.

Constant(s) A numerical value, text, macro generated value, control generated value (cell link) or any

other entry contained within a cell that is not a formula and does not contain a formula.Also referred to as a Hard-code.

Convention A methodology or approach that is recommended to implement best practice spreadsheetmodelling.

This methodology or approach is universally applicable and is recommended by theSpreadsheet Standards Review Board.

Entry Interface A cell, range of cells or control for entering base or sensitivity assumptions.

Fill Colour The background colour of a cell or range of cells.

Font Colour The colour of any character within a cell or range of cells.

Used to indicate cell content.

Format A single property of a cell or other object that affects its outward appearance.

Formula An equation that performs calculations, including a function or mathematical operator thatdoes not include a constant.

Hyperlink A link located within a workbook which, when activated, moves the active cell to anotherworksheet in the same workbook, a different workbook, or another area on the sameworksheet.

Link A reference within a formula that refers to a cell or range of cells that is located on anotherworksheet or in another workbook.

Location A cell reference or named position within a worksheet. Also referred to as Position.

Model Developer A person involved in the construction of a spreadsheet model and the derivation of theunderlying calculations.

Model User A person who relies upon output from a spreadsheet model for various purposes, often toanalyse or gain an understanding of the area being modelled or to provide them withassistance in decision making.

Output(s) Any component or a worksheet that is not an assumption. Also referred to as Non-Assumption(s).

Row A single horizontal group of cells which is a worksheet width wide and 1 cell long.

Section Sheets within a workbook that have been grouped (located) together.

Sensitivity Analysis The analysis of the sensitivity of the output of a spreadsheet model to changes in its baseassumptions (using sensitivity assumptions).

SensitivityAssumption

An entry into a workbook that drives running case outputs (output that includes theimpacts of both base assumptions and sensitivity assumptions).

Sheet A worksheet, macro sheet, dialog sheet or chart sheet in a workbook.

Spreadsheet Model A theoretical construct in a spreadsheet that represents numerical processes by a set ofvariables and a set of logical and quantitative relationships between them. A spreadsheetmodel may be a workbook or group of linked workbooks.


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Term Definition

Standard A methodology or approach that is required to implement Best Practice spreadsheetmodelling.

This methodology or approach is universally applicable and is the best way to develop BestPractice spreadsheet models.

Style A collection of pre-determined formats consistently applied to cells or other objects.

Time Series Model A workbook or group of linked workbooks that analyses numbers over more than onesequential periods of time. A Time Series Model includes more than one period and assuch requires date and time assumptions and period labels.

Workbook A file that contains one or more sheets.

Worksheet A sheet which consists of rows and columns, and therefore contains cells.


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Chapter 4.


4.1. OverviewThis Chapter states each of the Best Practice Spreadsheet Modelling Standards and Conventionsin order of Spreadsheet Modelling Area.

Each Best Practice Spreadsheet Modelling Standard and Convention has been stated, withoutcommentary, in the following pages. Each Standard and Convention is numbered and listedwithin one of the 16 different Spreadsheet Modelling Areas.

For more detailed information, commentary and examples relating to each Standard andConvention refer to the Best Practice Spreadsheet Modelling Standards - Commentary &Examples book (see Page 16 for more details).

As was stated above there are two types of Best Practice Spreadsheet Modelling Standardscontained in this book, Standards and Conventions. The Standards are contained in section 4.2below. The Conventions are contained in section 4.3.


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4.2. Best Practice Spreadsheet Modelling StandardsThere are currently 74 universally applicable Best Practice Spreadsheet Modelling Standards.The Standards are listed in the following Spreadsheet Modelling Areas:

Number Spreadsheet Modelling Area

1 General Concepts

2 Workbook Structure

3 Sheet Structure

4 Formats & Styles

5 Assumption Entry Interfaces

6 Sensitivity Analysis

7 Outputs & Presentations

8 Calculation Formulae

9 Naming Principles

10 Time Series Analysis

11 Checks

12 Printing & Viewing

13 Multiple Workbooks

14 Security & Protection

15 Visual Basic Programming

16 Miscellaneous

The following pages detail each Best Practice Spreadsheet Modelling Standard:

1. General Concepts

BPMS 1-1 Workbook Purpose

The purpose of a workbookshould be the primary consideration of a model developerduringevery stage of a workbooksdevelopment. The purpose of a workbookcan be universallysegregated into three levels as follows:

a) The purpose of the workbook;b) The purpose of each sheet; andc) The purpose of each component within each sheet.

BPMS 1-2 Sheet Classification

The content and purpose of every sheetin a workbookshould be visually identifiable at alltimes.


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BPMS 1-3 Sheet Content

Every sheetin a workbookshould be visually identifiable as being one of the following sheettypes:

a) Cover Sheetb) Contents Sheetc) Model Schematic Sheetd) Forecast Sheete) Blank Sheetf) Lookup Sheetg) Chart Sheet

BPMS 1-4 Sheet Purpose

Every sheetin a workbookshould have the purpose of either collecting assumptionsor notcollecting assumptions.

Hence, every sheetin a workbookshould be visually identifiable as having one of the followingsheetpurposes:

a)Assumption Sheet; orb)

Non-Assumption Sheet (Output Sheet).

Related Conventions: BPMC 1-1 Sheet Purpose Identification, Page 35.

BPMS 1-5 Assumption Classification

An assumptionis defined as anything within a workbookthat is intended to be manipulated bymodel usersto affect output.

Every assumptionin a workbookmust be classified as one of the following types:

a) Base Assumption; orb) Sensitivity Assumption.

BPMS 1-6 Cell Classification

The content and purpose of every cellin every worksheetshould be visually identifiable at alltimes.


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BPMS 1-7 Cell Content

Every cellin every worksheetshould be visually identifiable as containing one of the followingcontent types:

a) Constant;b) Formula; orc) Mixed(combination ofConstantand Formula).

Related Conventions: BPMC 1-2 Cell Content Identification, Page 36.

BPMS 1-8 Cell Purpose

Every cellin every worksheetshould have the purpose of either collecting assumptionsor notcollecting assumptions.

Hence, every cellin every worksheetshould be visually identifiable as having one of thefollowing cellpurposes:

a)Assumption Cell; orb) Non-Assumption Cell (Output Cell).

Related Conventions: BPMC 1-3 Cell Purpose Identification, Page 36.

BPMS 1-9 Assumption Cell Content

EveryAssumption Cellin every worksheetshould contain a constant.

Related Conventions: BPMC 1-2 Cell Content Identification, Page 36.


BPMS 2-1 General Cover Sheet

Every workbookthat contains more than one sheetshould contain a separate cover sheetasthe first sheetin the workbook.

This General Cover Sheetshould include the following information:

a) the model name;b) the subject of the workbook;c) general notes for other model developersand model users; andd) the model developersname and contact details (if appropriate).

Related Conventions: BPMC 2-1 Cover Sheet Notes, Page 36.


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BPMS 2-2 Workbook Sections

Every workbookthat contains multiple categories or similar types of information should beseparated into sections. A separate sectionshould be created in a workbookfor each sheetorgroup ofsheetscontaining similar types of information.

BPMS 2-3 Workbook Section Covers

Cover sheetsshould be used at the start of each sectionin a workbookto indicate thecommencement of each new section.

Related Conventions: BPMC 2-1 Cover Sheet Notes, Page 36.

BPMS 2-4 Basic Section Classifications

Every workbookthat contains base assumptionsand sensitivity assumptionsshould have itssheetsclearly segregated into at least the following three sections:

a) Base AssumptionsSection;b) Sensitivity AssumptionsSection; andc) Non-AssumptionsSection (OutputSection).

Related Conventions: BPMC 2-2 Workbook Section Structure, Page 36.

BPMS 2-5 Basic Section Content

a) Only assumption sheetscontaining base assumptionsshould be included within a baseassumptionssection of a workbook.

b) Only assumption sheetscontaining sensitivity assumptionsshould be included within asensitivity assumptionssection of a workbook.

c) Only non-assumptions sheets (output sheets)should be in included within an outputsectionof a workbook.

BPMS 2-6 Table of Contents

Every workbookwith more than one sheetshould contain a Table of Contentsoutlining the

structure and composition of the underlying workbook.

BPMS 2-7 Table of Contents Information

ATable of Contentsshould:

a) Show the sectionsand sub-sections of the workbook(if any sectionsor sub-sections havebeen created);

b) Reference the sheet titleof each sheetin the model;c) Clearly number each section, sub-section and sheet; and


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d) Be located near the front of the workbook(generally the second sheetin the order ofsheet tabs).

BPMS 2-8 Workbook Navigation

Every workbookwith more than one sheetshould contain:

a) a table of contentssheetoutlining the sections, sub-sectionsand sheetsin the workbook;b) hyperlinksfrom the table of contentsto every worksheetin the workbook; andc) a hyperlinkto the table of contentsalways in view on every worksheetin the workbook.

3. Sheet Structure

BPMS 3-1 Defined Sheet Types

Every workbookshould only contain a limited number ofsheettypes defined by their contentand purpose.

Related Conventions: BPMC 3-1 Sheet Types, Page 37.

BPMS 3-2 No Chart Sheets

To ensure hyperlinkaccess to all the sheetswithin a workbook, charts should be placed withinworksheetsrather than using chart sheets.

BPMS 3-3 Sheet Titles

Every sheetin a workbookshould contain a clearly highlighted sheet titlethat is:

a) Consistently formatted on every sheet;b) Consistently locatedon every type ofsheet; andc)Always in view on the screen when that sheetis active.

BPMS 3-4 Sheet Type Consistency

Sheetsof the same type within a workbookshould be consistently structured and formatted.

This standard applies to:

a) Sheet title stylesand position;b) Heading stylesand spacing;c) Columnand rowdimensions;d) Dataentry points;e) Hyperlinkpositioning;f) Visibility of gridlines;


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g) Grouping levels;h) Zoom and viewing properties;i) Window panes and splits; and

j) Formatsand colours.Related Conventions: BPMC 3-2 Sheet Content Consistency, Page 37.

BPMC 3-3 Hyperlinks in Worksheets, Page 38.

BPMC 3-4 Cover Sheet Content, Page 38.

BPMS 3-5 Grouping Rows or Columns

When hiding rowsor columnsin a worksheet, the rowsor columnsshould always be grouped,not hidden.

Related Conventions: BPMC 3-5 Limiting Worksheet Depth, Page 38.

BPMC 3-6 Freezing Panes, Page 38.

BPMC 3-7 Grouping Levels, Page 39.

4. Formats & Styles

BPMS 4-1 Formats & Styles Key

Every workbookshould contain a key or legend that explains the purpose of each formatandstylethat has been applied to the cellsin the workbook.

Related Conventions: BPMC 4-1 Use of Purpose Based Styles, Page 39.

BPMC 4-3 Work in Progress Identification, Page 39.

BPMS 4-2 Worksheet Data Alignment

All dataof the same type on a worksheetshould be consistently aligned down rowsor acrosscolumns.

Related Conventions: BPMC 4-2 Cell Data Alignment, Page 39.

BPMS 4-3 Denomination Identification

Every number in a workbookshould clearly indicate what type ofdenominationit is by either:

a) Stating thedenominationof a number in an appropriate corresponding heading, titleorlabel; or

b) Formatting the number such that it is displayed as its denominator(i.e. $20, 20 tonnes,20% or 20.0x).


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BPMS 4-4 Workbook Denomination

For each denominationin a workbookthere should be a single denominatorthat is usedconsistently throughout the workbook.Where multiple denominationsare required within a single workbook, each denominationshould be clearly labelledto inform other model developersand model users.

BPMS 4-5 Hyperlink Consistency

All hyperlinkswithin a workbookshould use a consistent, dedicated styleor formatso that theyare visually identifiable as being hyperlinks.

Related Conventions: BPMC 4-4 Hyperlink Formats, Page 39.


BPMS 5-1 Assumption Entry Interfaces

Every assumptionin a workbookthat has a finite number of entry possibilities should use anassumption entry interfacethat limits the model userto only those finite entry possibilities.

Related Conventions: BPMC 5-1 Preventing Invalid Assumption Entries, Page 39.

BPMC 5-2 Controlling Assumption Entry Interfaces, Page 40.

BPMC 5-8 Data Validation, Page 40.

BPMC 5-9 Visual Identification of Inactive Assumptions, Page 41

BPMS 5-2 Assumptions Location

All assumptionscontained in a workbookshould be located on dedicated and visuallyidentifiable assumption sheets.

Assumptionsshould never be locatedon non-assumption sheets (output sheets).

BPMS 5-3 No Assumption Repetition

Any single assumptionshould never be entered more than once into a workbook.

BPMS 5-4 No Heading, Title or Label Repetition

No heading, titleor labelthat is inserted into a workbookshould be entered more than once.All identical headings, titlesand labelsthat are contained in a workbookshould be linked to thebase heading, titleor labelthat was entered.


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BPMS 5-5 Control Cell Links

Every cell linkthat is attached to a controlin a workbookshould be:

a) Named to indicate what type ofcontrolthe cell linkrelates to; andb) Located underneath the controlto which the cell linkrelates.

Related Conventions: BPMC 5-3 Cell Link Visibility, Page 40.

BPMS 5-6 Control Lookup Data

When using a controlin a workbookthat requires an input range(lookup data), the lookup datashould always be located on a separate lookup sheet.

BPMS 5-7 In Cell Drop Down Lists

Where data validationis used to create in cell drop down liststhe rangein which the drop downlist is inserted should always be formattedas an assumption cell.


BPMS 6-1 Separate Sensitivity Assumption Sheets

Every workbookthat contains sensitivity analysisfunctionality should contain a dedicatedsensitivity assumptions section(which is separate to the base assumptions section).

Related Conventions: BPMC 6-1 Sensitivity Assumption Sheet Structure, Page 41.

BPMS 6-2 Sheet Type for Sensitivity Assumption Entry Interfaces

All sensitivity assumptionsin a workbookshould be locatedon assumption sheets.

BPMS 6-3 Separate Sensitivity Assumption Entry Interfaces

Sensitivity assumptionsshould always be locatedon a dedicated sensitivity assumption sheetwhich is separate to its corresponding base assumption sheet.


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BPMS 7-1 Segregation of Outputs

Output sheetsandpresentations, which may take the form of tables, graphs, diagrams orpictures, amongst other forms, should always be locatedin either:

a) a separate, clearly labelled section of a workbook; orb) a separate dedicated output workbook.

Related Conventions: BPMC 7-1 Separate Output Workbooks, Page 41.

BPMC 7-2 Output Section Structure, Page 41.

BPMS 7-2 Workbook Output Links

a)All model exportsshould always be linked directly to the workbook calculations.b) Model exportsshould never be moved from one workbookto another workbookin a

manner (i.e. copied and pasted as values) which creates static data that will not changewhen changes are made to the workbookfrom which the dataoriginated.

BPMS 7-3 Output Worksheet Summaries

A summary of the primary outputson each output worksheetshould always be provided at thetop of the output worksheet.

As such, an output worksheetcan be universally structured in the following order, going downthe columns(or more rarely across the rows):

a) Outputsummary (primary outputsonly); thenb) Outputcalculations (including details).


BPMS 8-1 Consistent Formulae

When more than one adjacent cellcontains a similar type ofoutputthe structure andcomponents of the formulaewithin the cellsshould always be consistent, so that the cellcan becopied across / down the relevant range without needing to make changes.

BPMS 8-2 No Assumptions on an Output Sheet

Cellsthat are locatedon an output worksheetshould never contain assumptions.

BPMS 8-3 Circular References

Aworkbookor group oflinkedworkbooksshould never contain a circular reference.


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BPMS 9-1 Workbook Naming

Each workbookshould be named such that the name:

a)Allows for different versions of the workbook;b) Remains consistent between versions of the workbook;c) Differentiates the workbookfrom other workbooks.

Related Conventions: BPMC 9-1 Workbook Name Display, Page 42.

BPMS 9-2 Sheet Naming

Every sheetname in a workbookshould indicate what type ofsheetthe name is referencing.

Related Conventions: BPMC 9-2 Sheet Naming - Postfixes, Page 42.

BPMC 9-3 Sheet Naming Key, Page 43.

BPMS 9-3 Range Naming

Every range namein a workbookshould describe the content or use of the rangebeing named.

Related Conventions: BPMC 9-4 Range Naming Consistency, Page 43.

BPMC 9-5 Range Naming - Prefixes, Page 43.

BPMC 9-6 Range Naming Key, Page 43.

BPMC 9-7 Range Naming Conflicts, Page 44.

BPMS 9-4 Standardised Naming Prefixes

Every rangenamein a workbookshould have a standardisedprefixto identify what type ofrangethe namerefers to or the purpose of that range.


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BPMS 10-1 Time Series Workbook General Assumptions

Every time series workbookshould clearly state, for each distinct time series:

a) the time series model start date; andb) the time seriesperiodicity.

Related Conventions: BPMC 10-1 Time Series Workbook Common Assumptions, Page 44.

BPMS 10-2 Time Series Workbook Period Labels

Atime series workbookshould always contain a consistent set ofperiodicitylabels and countersthat are located in the samepositionon every relevant worksheetin the workbook.

Theperiodicity labelsand counters that should appear in every time series workbookare:

a) Period start date;b) Period end date; andc) Period number (counter).

BPMS 10-3 Time Series Workbook Period End Dates

The period end date label for each period in a workbookshould always be in view on thescreen.

BPMS 10-4 Time Series Workbook Periodicity Identification

Theperiodicityof each time series worksheetshould be clearly identified on each time seriesworksheet.

BPMS 10-5 Time Series Workbook Number of Periods

Atime series workbookshould always include a cellor cell rangethat indicates the number ofperiods in the workbook.

BPMS 10-6 Time Series Workbook Worksheet Consistency

Time series worksheetsusing the sameperiodicitywithin a workbookshould always bestructured such that they:

a) Contain the same number of periods; andb) Have the first period starting in the same column(or more rarely, row).


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11. Checks

BPMS 11-1 Checks Classification

All checksin a workbookshould be classified as being one of the following check types::

a) Error Check;b) Sensitivity Check; orc)Alert Check.

BPMS 11-2 Error Checks

Every workbookshould contain appropriate error checksto identify errorsin the workbook.

BPMS 11-3 Sensitivity Checks

Every workbookthat contains one or more sensitivity assumptionshould contain sensitivitychecksto identify when there is an operativesensitivity assumption.

BPMS 11-4 Alert Checks

Every workbookthat requires checksthat are not classified as error checksor sensitivity checksshould contain alert checksto identify when such a check has been triggered.

BPMS 11-5 Error Checks Worksheet

The outcome of every error checkin a workbookshould be displayed on a dedicated andseparate error checks worksheet.

BPMS 11-6 Sensitivity Checks Worksheet

The outcome of every sensitivity checkin a workbookshould be displayed on a dedicated andseparate sensitivity checks worksheet.

BPMS 11-7 Alert Checks Worksheet

The outcome of every alert checkin a workbookshould be displayed on a dedicated andseparate alert checks worksheet.


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BPMS 11-8 Check Indicator Flag

Amessage or indicator that clearly notifies the model developeror userthat a checkhas beentriggered in a workbookshould always be in view on every worksheetin a workbook.

Related Conventions: BPMC 11-1 Linking Checks to Model Name Entry Cell, Page 44.

BPMS 11-9 Check Cell Formatting

Each check cellin a workbookshould be formattedin such a way that it will visually indicatewhen an error, sensitivityor alert checkhas been triggered.

Related Conventions: BPMC 11-2 Check Red Font, Page 44.

BPMS 11-10 Dedicated Checks Worksheets

Aworkbookshould not contain more than one of each of the following types of checkworksheet:

a) Error Checks Worksheet;b) Sensitivity Checks Worksheet; and/orc)Alert Checks Worksheet.


BPMS 12-1 Table of Contents Page Numbers

Every workbookwith more than one sheet should contain a table of contentsthat displays thecorresponding printed page numbers for each page within each sheet. As such a workbookshould always print with a Table of Contentsthat is consistent with any page numbers printedon the individual sheetpages.

BPMS 12-2 Sheet Page Numbers

Every sheetwithin a workbookshould contain page numbers that correspond with the printedpage numbers stated in the workbook table of contents.

BPMS 12-3 Page Margin Consistency

The page margins on every sheet in a workbookshould be consistent.

BPMS 12-4 Print View Consistency

The print scaling setting and hence the size of the content on each printed page in a workbookshould, where practical, be consistent for each sheet.

Related Conventions: BPMC 12-1 Workbook Print Scaling, Page 45.


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BPMS 12-5 Page View Consistency

The view type should be the same for each sheetin a workbook.

BPMS 12-6 Worksheet View Consistency

Prior to providing a workbookto a model user, the view of every worksheetin the workbookshould be set such that the top-left corner of the worksheetis in view (i.e. cellA1 is selected).


BPMS 13-1 External Workbook Imports

Any and all linksfrom an external workbookinto a workbookshould be made via dedicated and

separate model import sheets.

Related Conventions:

BPMC 13-1 Workbook Specific Model Import and Export Sheets,Page 45.

BPMC 13-2 Model Import and Export Sheet Consistency, Page 45.

BPMC 13-3 No Complex , Page 45.

It is recommended that functions not beincluded within formulasthatcontain linksto external workbooks.

BPMC 13-4 Model Import and Export Sections, Page 45

BPMS 13-2 External Workbook Exports

Any and all linksto an external workbookfrom a workbookshould be made via dedicated andseparate model export sheets.

Related Conventions:

BPMC 13-1 Workbook Specific Model Import and Export Sheets,Page 45.

BPMC 13-2 Model Import and Export Sheet Consistency, Page 45.

It is recommended that functions not beincluded within formulasthatcontain linksto external workbooks.

BPMC 13-4 Model Import and Export Sections, Page 45


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BPMS 14-1 Protection of Non-Assumptions

Security andprotectiontools should be used to ensure that only the assumptionscomponentsof a workbookare capable of manipulation by model users.

Related Conventions: BPMC 14-2 Sheet & Cell Protection, Page 46.


Related Conventions: BPMC 15-1 Recording Macros, Page 46.

16. Miscellaneous

BPMS 16-1 Automatic Calculation Setting

Aworkbookshould, where practical, be set to calculate automatically.


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4.3. Best Practice Spreadsheet Modelling ConventionsThere are currently 62 universally applicable Best Practice Spreadsheet Modelling Conventions,

which are aligned with the following Spreadsheet Modelling Areas:

Number Spreadsheet Modelling Area

1 General Concepts

2 Workbook Structure

3 Sheet Structure

4 Formats & Styles

5 Assumption Entry Interfaces

6 Sensitivity Analysis

7 Outputs & Presentations

8 Calculation Formulae

9 Naming Principles

10 Time Series Analysis

11 Checks

12 Printing & Viewing

13 Multiple Workbooks

14 Security & Protection

15 Visual Basic Programming

16 Miscellaneous

The following pages contain each Best Practice Spreadsheet Modelling Convention:

1. General Concepts

BPMC 1-1 Sheet Purpose Identification

It is recommended that the purpose of every sheetin a workbookbe identified using its fillcolourproperty as follows:

a) Light grey fill colourfor assumption sheets; andb) White / No fill colourfor non-assumption sheets(output sheets).


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BPMC 1-2 Cell Content Identification

It is recommended that the content of every cellin a workbookbe identified using its fontcolourproperty as follows:

a) Blue font colourfor constants;b) Blackfont colourfor formula; andc) Green font colourfor mixed(combination ofconstantand formula).

BPMC 1-3 Cell Purpose Identification

It is recommended that the purpose of every cellin a workbookbe identified using its fill colourproperty as follows:

a) White / No fill colourfor assumption cellson (grey fill colour) assumption sheets; andb) Fill colourthe same as the fill colourof the applicable worksheetfor non-assumption cells

(output cells).

BPMC 1-4 Mixed Cell Exceptions

It is recommended that the constants1 or 0 be disregarded for the purposes of classifying acellas having mixedcontent.


BPMC 2-1 Cover Sheet Notes

It is recommended that every cover sheetin a workbookinclude provision for notesthat are inview and in a consistent location.

Cover sheetnotesshould be included on each cover sheet, describing:

a) The contents of the following section;b) Instructions for model usersor developers; and / orc) Warnings for model usersor developers.

BPMC 2-2 Workbook Section Structure

It is recommended that every workbookbe structured consistently to include the followingsectionsin this order:

a) Cover& Contents;b) Model Documentation and Diagrams (where relevant);c) Base Assumptions;d) Sensitivity Assumptions(where relevant);e) Outputs;


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f) Presentations(where relevant); andg)Appendices(where relevant).

3. Sheet Structure

BPMC 3-1 Sheet Types

It is recommended that the 7 basic sheettypes stated in BPMS 1-3 Sheet Content, be furthersub-divided into 12 different sheettypes as follows:

a) Cover Sheeti) General Cover Sheetii) Section Cover Sheetiii)Sub Section Cover Sheet

b) Contents Sheetc) Model Schematic Sheetd) Forecast Sheet

i) Forecast Assumptions Sheetii) Forecast Output Sheet

e) Blank Sheeti) Blank Assumptions Sheetii) Blank Output Sheet

f) Lookup Sheeti) General Lookup Sheetii) Blank Lookup Sheet

g) Chart SheetThese categories are exhaustive, and should be the only sheettypes required to develop anyform ofworkbook.

BPMC 3-2 Sheet Content Consistency

It is recommended that every sheetin a workbookconsistently apply the following properties:

a) Sheet title styleandposition;b) Headingstylesand spacing;c)

Purpose based

formatsand

styles;


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d) Hyperlinkpositionsand styles;e) Zoom / scaling percentage of the visible and printed sheets;f) Visibility of gridlines;g) Grouping levels; andh) Window panes / splits.

BPMC 3-3 Hyperlinks in Worksheets

It is recommended that every worksheet, where relevant, contain the following hyperlinks:

a) Sheet left hyperlink(to move to the worksheetto the left);b) Sheet right hyperlink(to move to the worksheetto the right); andc) Sheet top hyperlink(to move to the top of the worksheet).

It is recommended that all of these hyperlinksbe in view on the screen at all times.

BPMC 3-4 Cover Sheet Content

It is recommended that every cover sheetin a workbookcontain the following information:

a)Atitlefor the following section;b)A number (logically ordered in conjunction with the other cover sheetsin the workbook);

and

c) The model name.This information should be consistently formattedandpositionedon all cover sheetsin theworkbook.

BPMC 3-5 Limiting Worksheet Depth

It is recommended that the number ofrowsutilised on any worksheet be limited, wherepractical, to what can be seen on the screen without vertical scrolling.

It is recommended that the number ofrowsutilised on any one worksheetbe limited to the

minimum possible. To reduce the depth of a worksheetwhere there is an unavoidably largeamount of information it is recommended that:

a) Rowsare grouped and collapsed; orb) Different types of information be moved to new worksheets(splitting the worksheet

information).

BPMC 3-6 Freezing Panes

It is recommended that frozen panesbe used on every worksheetin a workbook(excludingcover sheets) to ensure that the sheet title, any hyperlinks, error flags or date and time titlesare always in view on the screen.


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BPMC 3-7 Grouping Levels

It is recommended that rowsand columnswithin the worksheetsin a workbookbe groupedconsistently across all worksheetsto create the following three views:

a) Summary view(compacted);b) Print view(semi-compacted, if required); andc) Expanded view(un-compacted).

4. Formats & Styles

BPMC 4-1 Use of Purpose Based Styles

It is recommended that standardised, purpose based stylesbe applied in order to adopt themost efficient method of applying different combinations offormatsand consistently identifyand differentiate cellpurpose and content.

BPMC 4-2 Cell Data Alignment

It is recommended that all datawithin cellsor rangesofcellsbe aligned such that differentnumber formats, including any relevant symbols are perfectly aligned to the right of the cellorcell range(different number formatsmight include positive numbers, negative numbers,currency, percentages and multiples).

BPMC 4-3 Work in Progress Identification

It is recommended that any cellsin a workbookwhich have not been finalised be coloured inlight yellow fill colourto visually identify these cells as being work in progress.

BPMC 4-4 Hyperlink Formats

It is recommended that all hyperlinksin a workbookbe consistently formattedas follows:

a) Bold and underlined font; andb) Plum font colour.


BPMC 5-1 Preventing Invalid Assumption Entries

It is recommended that controls, data validationand sheetprotectionbe used to limit the scopefor model usersto enter invalid assumptionsinto assumption sheets.


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BPMC 5-2 Controlling Assumption Entry Interfaces

It is recommended that combinations of the following tools be used to limit assumption entryinterfacesto finite possibilities:

a) Controls;b) Data validation;c) Error checking;d) Conditional formatting; ande) Sheet protection.

BPMC 5-3 Cell Link Visibility

It is recommended that when a workbookis finalised, the font colourof all of the control celllinksbe set to the same colour as the fill colourof the worksheeton which they are located (tohide them from view).

BPMC 5-4 Use of Check Box Controls

It is recommended that a check boxbe used in a workbookwhen the assumptionentry isbinary(or Boolean).

BPMC 5-5 Use of Button Controls

It is recommended that a buttonbe used in a workbookonly when a macroneeds to be

assigned to a control.

BPMC 5-6 Use of Drop Down Box or List Box Controls

It is recommended that a drop down boxor list boxbe used in a workbookwhen there are adefinite and limited number of possible assumptionentries.

BPMC 5-7 Use of Spin Button or Scroll Bar Controls

It is recommended that a spin buttonor scroll barbe used in a workbookwhen an assumptionentry is in the form of a numbered sequence that has upper and lower bounds.

BPMC 5-8 Data Validation

It is recommended that data validationbe used to:

a) Inform model usersabout the assumptionentries required;b) Control the type ofdatabeing entered into assumption cells; and / orc) Set the minimum and maximum bounds of the assumptionsthat are entered.

Data validationshould be used when the type ofassumptionentry is known, but the use ofcontrolsis not suitable.


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BPMC 5-9 Visual Identification of Inactive Assumptions

It is recommended that an assumption cellthat is currently irrelevant for outputsas aconsequence of a prevailing assumptionin another assumption entry interfacebe visuallyidentifiable as being an inactive assumption cellusing grey fill colourand white font colour.


BPMC 6-1 Sensitivity Assumption Sheet Structure

It is recommended that, to the extent that it is practical, any sensitivity assumption entryinterfacein a workbookbe structured in consistency with its corresponding base assumptionentry interface.

BPMC 6-2 Sensitivity Outputs

It is recommended that, whenever a sensitivity assumption entry interfaceis included in aworkbook, that two versions of the corresponding outputbe created in the workbooktorepresent each of the following:

a) Base case(derived from the base assumptionsonly); andb) Sensitivity case(derived from both base assumptionsand sensitivity assumptions).

These different outputsshould be on separate sheetsand contain clear titles to distinguishthem from one another.


BPMC 7-1 Separate Output Workbooks

It is recommended that separate, dedicated output workbooksbe created for medium to largeworkbooksor where the model developerdoes not want to divulge certain workbookoutput tocertain model users.

BPMC 7-2 Output Section Structure

It is recommended that, where practical, the output sectionswithin a workbookbe structured inconsistency with their corresponding assumption sections.


BPMC 8-1 Complex Formulae Schematics

It is recommended, where practical, that complex formulaewithin a workbookbe explainedthrough the creation offormulae schematics(diagrams representing formulalogic) that areplaced in a separate modelschematicsectionof the workbook.


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BPMC 8-2 Multiple Function Formulae

It is recommended that formulaewithin a workbookthat contain more than one functionbeseparated within the formulasuch that each new functionis displayed on a separate line of theformula bar.


BPMC 9-1 Workbook Name Display

It is recommended that every workbookhave a name and that the name correspond with thefile name.

It is recommended that every worksheetin the workbookdisplay the model name(in additionto the sheet title) and that the model nameis consistently formattedand located.

BPMC 9-2 Sheet Naming - Postfixes

It is recommended that the followingpostfixesbe included in the name assigned to a sheet tabto indicate the type ofsheetthat is being named:

Worksheet Types Worksheet Tab Postfixes:

a) Coveri) General Cover Sheet:ii) Section Cover Sheet:iii) Sub-Section Cover Sheet:

GC

SC

SSC

b) Contents Sheet: Contentsc) Model Schematic Sheet: MSd) Forecast

i) Forecast Assumption Sheet:ii) Forecast Output Sheet:

FA

FO

e) Blanki) Blank Assumption Sheet:ii) Blank Output Sheet:

BA

BO

f) Lookupi) General Lookup Sheet:ii) Blank Lookup Sheet:

GL

BL

g) Chart Sheet: CHT

Additionally, when any of these sheets are being used as a model importor model exportsheet,the followingpostfixesshould be included in the sheetnamebefore the above mentioned

postfixes:

Worksheet Types Worksheet Tab Postfixes

a) Model Import Sheet: MIb) Model Export Sheet: ME


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These sheet naming postfixesare exhaustive, and should be the only sheet naming postfixesrequired when naming sheets.

BPMC 9-3 Sheet Naming Key

Where the sheet naming postfixesrecommended by BPMC 9-2 are used in a workbook, it isrecommended that a key or legend that explains the sheet naming postfixesalso be included inthe workbook.

BPMC 9-4 Range Naming Consistency

It is recommended that every anchored cellor anchored rangethat is referred to by formulaeina workbookbe named.

BPMC 9-5 Range Naming - Prefixes

It is recommended that the followingprefixesbe used when naming rangesto indicate the typeofrangethat is being named or the purpose of that range:

Range Type Naming Prefix Range Description / Purpose

RowArray RA_ Single row, multiple column, single area array

ColumnArray CA_ Single column, multiple row, single area array

Block Array BA_ Single area, multiple cell, non-row, non-columnarray

Multiple Area Array MAA_ Multiple area (includes areas of any type)

Base Cell BC_ Single cellbase cell(for OFFSET functionreference,etc)

Lookup Array LU_ Names a Lookup Table Arrayon a Lookup Sheet

Hyperlink Cell Reference HL_ Hyperlink cell reference

Check Box Cell Link CB_ Check box cell link

Drop Down Box Cell Link DD_ Drop down box cell link

List Box Cell Link LB_ List box cell link

Option Button Cell Link OB_ Option button cell link

Spin Button Cell Link S_ Spin button cell link

Scroll Bar Cell Link SB_ Scroll bar cell link

Residual N/A Residual category (i.e. single cellnon-base cells, etc.)

This list of range namingprefixesis exhaustive, and should be the only range namingprefixesrequired when naming cells, cell rangesor control cell links.

BPMC 9-6 Range Naming Key

Where the range naming prefixesrecommended by BPMC 9-5 are used in a workbook, it is

recommended that a key or legend that explains the range naming prefixesalso be included inthe workbook.


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BPMC 9-7 Range Naming Conflicts

Where a worksheet rangequalifies for more than one range naming prefixunder BPMC 9-5, theprefixderived from the purpose of the rangeshould be used when naming the range, not theprefixderived from its type.


BPMC 10-1 Time Series Workbook Common Assumptions

It is recommended that every time series workbookcontains the following commonassumptions:

a) Conversion factors (eg 10, 100, 1000); andb) Time constants (eg months in year, days in week, weeks in year).

BPMC 10-2 No Mixing of Periodicities

Atime series worksheetshould never contain assumptionsor outputsfor more than oneperiodicity.

BPMC 10-3 Multiple Periodicities in One Workbook

No section(or sub-section, if present) in a time series workbookshould contain more than oneperiodicity.

BPMC 10-4 Time Series Data Direction

It is recommended, where practical, thatperiodicitylabels bepositionedacross rows, not downcolumns.

11. Checks

BPMC 11-1 Linking Checks to Model Name Entry Cell

It is recommended, where relevant, that the outcome of the check type summary referred to inBPMC 11-4 be linked to the model nameentry cellon the General Cover Sheet, and that this

cellbe referenced by formulaon every worksheet in the workbook(where it will always be inview on the screen).

Related Conventions: BPMC 11-4 Check Type Summary, Page 45.

BPMC 11-2 Check Red Font

It is recommended that each check cellin a workbookbe conditionally formattedsuch that itwill change its font colourto red (referred to as Check Red) when an error, sensitivity or alertcheckhas been triggered.


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BPMC 11-3 Check Calculation Location

It is recommended that the calculations for checksbe locatedon the sheetto which the checkis relevant and not on the associated check sheet.

BPMC 11-4 Check Type Summary

It is recommended that the outcome of all checksof each check typebe summarised into asingle check cellfor each check typecontained within a workbook.


BPMC 12-1 Workbook Print Scaling

It is recommended that theprint scalingfor every worksheetin a workbookshould be set to100%, where possible, to ensure clarity and consistency when printing and viewing a printedcopy of the workbook.

BPMC 12-2 Printed Information

It is recommended that every printed page include the following information:

a) The date that the page was printed;b) The name of the workbook; andc)

The page number.


BPMC 13-1 Workbook Specific Model Import and Export Sheets

It is recommended that you create separate model importand model export sheetsfor eachexternal workbookthat a workbook linksfrom and to.

BPMC 13-2 Model Import and Export Sheet Consistency

It is recommended that the model import sheetin one workbookbe structured in exactly thesame way as the corresponding model export sheetin the relevant linked workbook.

BPMC 13-3 No Complex Formulas on Model Import Sheets

It is recommended that functionsnot be included within formulasthat contain linksto externalworkbooks.

BPMC 13-4 Model Import and Export Sections

It is recommended that model importand model export sheetsbe placed in separate, dedicated

sectionsof a workbook.


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BPMC 13-5 Multiple Workbook Diagrams

It is recommended that whenever there are more than two workbookslinkedto each other in aworkbookgroup, that a diagram be created within each workbookshowing the linksbetweenthe group oflinkedworkbooks.


BPMC 14-1 Workbook Protection

It is recommended that workbook protectionbe used whenever a model developeris requiredto:

a) Control access to a workbook;b) Control access to designated sheetswithin a workbook; and / orc) Prevent structural changes being made to a workbook.

BPMC 14-2 Sheet & Cell Protection

It is recommended that every cellin a workbookthat is not an assumption cellbeprotected(locked) prior to distribution of the workbookto model users.

For this cell protectionto operate effectively, every sheetin the workbookmust beprotected.

BPMC 14-3 No Unnecessary Passwords

It is recommended that unless the model developerdoes not want model usersto accesscertain areas of a workbookwhenprotectinga worksheetor workbook, that no password beapplied.

BPMC 14-4 Storing Passwords

It is recommended that when applying workbookor worksheet protectionusing passwords, thata password list be printed and stored in a safe location for future reference.


BPMC 15-1 Recording Macros

It is recommended that only extremely simple macrosbe created using the macrorecorder.Macroscreated using the macrorecorder should not be relied upon by model developerswhoare not familiar with the resulting source code.

Macrosshould only be written by experienced VBE programmers.


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16. Miscellaneous

BPMC 16-1 Model Developer Identification

It is recommended that the name of the model developeris entered into the workbook(normally on the cover sheetif applicable).

BPMC 16-2 Emphasising Information

It is recommended that you create and consistently apply various levels ofheadingsin aworkbookthat visually communicate the appropriate level of emphasis or importance thatshould be attached to each cellor rangeofcells.

BPMC 16-3 Help Files & Instructions

It is recommended that every workbookbe accompanied by instructions that explain thefollowing for both model usersand future model developers:

a) What the primary outputsare;b) What the primary assumptionsare;c) How to use the workbookor group ofworkbooks; andd)Any other relevant notesor commentary.


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Defined Words & Terms


Appendix 1.Defined Words & Terms

Term or Word Definition

#REF! An error value which denotes that the value resulting from the formula in a cell isinvalid.

Active Cell A cell on a worksheet which is outlined by the active cell indicator and which is readyfor formatting, entering data, formulae, or any other action which can be performedin a cell.

Alert Check(s) Tests includ

best practice spreadsheet modelling standards v4.1

Documents