Understanding the BASE and corkscrew concepts

These are common standards to follow in modeling our balance sheet items. BASE stands for Beginning add Additions less Subtractions equals End. The corkscrew concept refers to the way in which the BASE setup is connected from one period to the next. In the following screenshot, we will see that the closing balance from one year is carried forward as the opening balance of the next year:

Figure 7.1 – BASE formation

We notice that the movement starts from the opening balance, goes down the rows of the first year to the closing balance, then goes back up to the opening balance of the second year, then down the rows of the second year, and so on:

Figure 7.2 – Corkscrew formation

This creates a corkscrew effect, as seen in the previous screenshot.