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It is important to make distinction between the line drawn in the model that represents the frame element and the line at the actual centroid of the frame element (neutral axis). When the insertion Insertion point is centroid (10), these two lines coincide and checking or not checking the "Do not transform stiffness for offsets from centroid" produces exactly the same results. For any other insertion point, these two lines are in different locations and the following applies:

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For example, if there is a deck modeled above a frame element with top center (8) insertion point, the overall stiffness of composite section of the beam and the deck would be higher for Case 1 than for Case 2.Composite Section