TRADRILL / GLOSSARY / TRANSMISSION CHAINS
What Is the Magnitude Two-Track Rule?
Category: Transmission chainsChinese: 量级双轨
Short definition
The magnitude two-track rule classifies every hop's magnitude as disclosed — a reported figure, or assumption-free arithmetic on two reported figures from the same source — or estimated — any value that needs an assumption, extrapolation or third-party model — and displays and gates the two tracks differently.
What it means
Numbers in a chain come from two very different places. Some are reported: a segment's revenue in a filing, a customer's share in a concentration note, the difference or ratio of two such figures. Others are built: a unit count times an assumed price, a capacity figure scaled to full utilisation, a share borrowed from an analyst model. Both are useful; they are not the same kind of number. The two-track rule refuses to let them wear the same colour.
The dividing line is assumptions. Arithmetic on two reported figures from the same source with no added input — a difference, a quotient — stays disclosed, because a reader can reproduce it from the document alone. The moment any factor enters that the document does not contain, the number is estimated. That includes innocent-looking steps: converting units at an assumed price, taking the midpoint of a range, assuming a ramp reaches its announced capacity.
The tracks differ in what they must carry. A disclosed magnitude must quote the passage the figures come from. An estimated magnitude must list what its evidence does not support — each assumption is, by definition, something the source does not establish. A note is not published while a hop is missing the requirement for its track. Readers see the tracks in different colours and can weight the chain accordingly.
Telling the tracks apart
A chain that applies the rule consistently shows these patterns:
- Disclosed magnitudes cite a passage containing the figure or both figures behind it.
- Estimated magnitudes list their assumptions one per line in the basis.
- A midpoint, a full-utilisation figure or a price conversion is never on the disclosed track.
- The two tracks are visually distinct wherever a magnitude appears, including in the arithmetic section.
- A hop can move from estimated to disclosed when a later filing reports the figure — with its as-of date updated.
- The chain's verified count includes only hops whose magnitude meets its track's requirement.
Assigning a magnitude to a track
The decision routine, run once per hop before the number is written down:
- 1.List every input the number was computed from and where each came from.
- 2.If every input is a reported figure from the cited source and the operation is a difference or quotient, the track is disclosed; quote the passage.
- 3.If any input is assumed, borrowed from a different source, or produced by a model, the track is estimated; write each assumption as a supports-no line.
- 4.Check the basis line states the period and denominator regardless of track.
- 5.When new disclosure arrives, re-run the routine rather than editing the number in place.
Frequently asked questions
Is an estimated magnitude a weaker claim?
It is a differently-supported claim. An estimate can be the best available number and still be estimated; the label tells the reader which parts of the chain rest on the document and which rest on the author's inputs. What it never does is hide.
Why is a midpoint not disclosed when both ends of the range are?
Because choosing the midpoint is an assumption about where in the range the true value sits. The range itself is disclosed; a chain may record the bound. The moment it picks a point inside, it has added something the document does not say.
Can a chain be entirely estimated?
It can, and some early-stage events allow nothing else. The rule does not forbid estimates; it forbids presenting them as disclosures. A chain that is honestly all-estimated tells the reader more than one that dresses two inferences as facts.
Related terms & reading
Related terms: Evidence entailment · Revenue exposure · Evidence pack
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