The engine FADEC "power manages" the engine using N1 for GE
engines and EPR for PW
/RR. I'll explain N1 power management since that's what I'm most familiar with.
Power management is designed to produce constant thrust for all temperatures up to some limit. The FADEC includes tables of N1K (corrected N1). Corrected N1 is a N1 value adjusted for the current ambient temperature. This allows the FADEC to determine a demand N1 speed for all temperatures. The tables of N1K are functions of Mach number, ambient pressure and ambient temperature. The goal of the designer is to define the N1K tables to produce constant thrust at all temperatures. This is called maximum flat rated thrust
However, there is a limit where the engine hot section components must be protected from extreme temperatures. Above this limit, the N1K tables are pulled back. The point where the flat-rated thrust breaks off is often called cornerpoint temperature. If you were to plot thrust versus ambient temperature for a given power setting, you would see a clear "corner point". Below this cornerpoint you have flat-rate thrust, above the cornerpoint you have decreasing thrust as temperature increases.
Now, back to your question. Derate using the assumed temperature method is accomplished by setting the temperature input above
the cornerpoint. If set below the cornerpoint, not much would change, but if set above the cornerpoint N1K will be pulled back. The higher you push the temperature, the more pull back you get.