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As upgrades are issued by the MIE, qualifying license records are marked to be used to "settle up" with an upgrade license when it is purchased and loaded into the MIE.  Once the upgrade licenses are loaded into the MIE (either via the ASN processor or the User Interface), the marked qualifying licenses are nullified in favor of the upgrade license.

To know how many upgrades have been issued, and therefore how many upgrade licenses to purchase at any given moment, use the Manage Upgrades screen, which is available as a fly-out option from Managed Software.  The column entitled Upgrades Issued shows the count of upgrade licenses to purchase.

NOTE:  Even though a qualifying license has been marked, it may not be used for nullification of an upgrade if constraints on the upgrade have been established.  If the qualifying license, even though it has been marked, does not meet one or more of any established constraints, it will not be used (it will remain marked, however).  Qualifying licenses that are marked are consumed ahead of qualifying licenses that have not been marked.