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Timer count (CNT register) exceeds auto-reload (ARR) in encoder mode

Question asked by Jack Peacock on Dec 7, 2011
On an STM32F103Z (ST3210E eval) I set up TIM4 in encoder mode, QEI interface with phase A on CH1 and phase B on CH2.  Encoder mode is T1T2, triggering on falling edge of either phase.  The encoder is a 400 position optical wheel, so I set the auto reload to 399.

The problem is the count register (TIM4_CNT) sometimes shows 400 instead of rolling over at 399 back to zero.  Otherwise the timer is working as expected, tracking direction and position ticks.

What condition allows a timer to exceed the reload when in encoder mode?
  Jack Peacock