IPART uses a building block methodology to calculate regulated business revenue requirements. Revenue requirements are converted into tariffs or prices in accordance with the method of control deemed appropriate for the determination in question. This simplified example of IPART's approach to building block calculations, price setting and financial ratio analysis shows how IPART's financial models for regulated businesses generally work. Please note that this model is for illustrative purposes only. It does not present the basis of pricing for any particular determination. Please see IPART's reports for information on how prices were set for a particular determination.