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  • Steps 2 and 3: Calculate the safe harbour debt amount

    The safe harbour debt amount for a financial entity is the lesser of the following two amounts:

    • the total debt amount – step 2
    • the adjusted on-lent amount – step 3.

    Both of these amounts must be calculated. The adjusted on-lent amount contains a concession in respect of the entity's on-lending business. It applies a 1.5:1 ratio to the part of the entity's business that does not constitute on-lending and then increases this amount by the value of the entity's on-lending business.

    However, the safe harbour debt amount is capped at 15:1 by the total debt amount, which applies a ratio of 15:1 to the entity's total business.

    The total debt amount contains a further concession for certain assets called zero-capital amounts. These amounts can be wholly funded by debt capital.

    Table 31: Non-ADI financial inward investment vehicle's step 2, Table 33: Non-ADI financial inward investment vehicle's step 3, Worksheet 23: Non-ADI financial inward investment vehicle's step 2 and Worksheet 25: Non-ADI financial inward investment vehicle's step 3 explain how to work out the total debt amount and adjusted on-lent amount.

    If the entity has any associate entities, you also need to work through:

    • Table 32: Non-ADI financial inward investment vehicle's step 2A and Worksheet 24: Non-ADI financial inward investment vehicle's step 2A for the total debt amount
    • Table 34: Non-ADI financial inward investment vehicle's step 3A and Worksheet 26: Non-ADI financial inward investment vehicle's step 3A for the adjusted on-lent amount.

    See also:

    Table 31: Non-ADI financial inward investment vehicle's step 2

    Steps

    Comments

    Step 2.1: Calculate the average value, for the income year, of all the entity's assets

    Insert this amount at E on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    The first step is to work out the average value of the entity's assets

    Step 2.1A: Calculate the average value of the entity's excluded equity interest for that year

    Insert this amount at MM on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    Certain short-term equity interests reduce the safe harbour debt amount for integrity reasons.

    See excluded equity interests

    Step 2.2: Transfer the amount from B on Worksheet 22: Non-ADI financial inward investment vehicle's step 1 to B on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    This is the average associate entity debt and is the same amount calculated at B on Worksheet 22: Non-ADI financial inward investment vehicle's step 1 – step 1.2 – and can be transferred directly in from there. Associate entity debt is a loan asset of the lender that broadly represents the debt interests issued to the lender by the associate entity

    Step 2.3: Calculate the average value, for that year, of all the entity's associate entity equity

    Insert this amount at F on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    Broadly, associate entity equity is the sum of the equity invested in, and interest-free loans granted to, associate entities

    Associate entity equity is an asset of the investing entity and the value is what the investing entity has valued its investment at under the accounting standards.

    Step 2.4: Calculate the average value, for that year, of all the entity's non-debt liabilities

    Insert this amount at G on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

     

    Step 2.5: Calculate the average value of the entity's zero-capital amount

    Insert this amount at ZC on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

     

    Step 2.6: Calculate net Australian assets funded by debt and equity. This is the result of EMMBFGZC

    Insert the result at H on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    This step reduces total assets E by the amounts worked out in steps 2.2 to 2.5. The amount at H represents the net Australian assets funded by debt and equity

    Step 2.7: Multiply the amount at H by 15/16

    Insert the result at J on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    Multiplying the amount at H (net assets) by 15/16 reflects the debt to equity ratio of 15:1

    Step 2.8: Add back the average value of the zero-capital amount from step 2.5

    Insert this amount at ZC on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    The zero-capital amount was taken out at step 2.6 and is now added back so that the total debt amount is increased by the average value of the zero-capital amount

    Step 2.9: If the entity does not have any associate entities that are non-ADIs and subject to the thin capitalisation rules, insert 0 (zero) at K on Worksheet 23: Non-ADI financial inward investment vehicle's step 2. Otherwise, calculate the entity's average associate entity excess amount – see Worksheet 24: Non-ADI financial inward investment vehicle's step 2A. Transfer the amount at K on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A and insert at K on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    Broadly the average associate entity excess amount is the excess borrowing capacity of any associate entity that is either a non-ADI inward investment vehicle or a non-ADI inward investor. It also recognises any premium paid for the investment in an associate entity. This is worked out in step 2A – K on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    If the entity does not have any associate entities that are non-ADIs and subject to the thin capitalisation rules, this amount is zero

    Step 2.10: Calculate the entity's total debt amount by adding the amounts at J, ZC and K

     

    Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    Steps

    $

    Step 2.1: Average assets

    (E) _____________

    Step 2.1A: Average excluded equity interests

    (MM) ____________

    Step 2.2: Average associate entity debt from B on Worksheet 22: Non-ADI financial inward investment vehicle's step 1

    (B) _____________

    Step 2.3: Average associate entity equity

    (F) _____________

    Step 2.4: Average non-debt liabilities

    (G) _____________

    Step 2.5: Average zero-capital amount

    (ZC) _____________

    Step 2.6: EMMBFGZC

    (H) _____________

    If H is negative, it is taken to be zero.

    Step 2.7: H   15/16

    (J) ______________

    Step 2.8: Average zero-capital amount from step 2.5

    (ZC) _____________

    Step 2.9: Average associate entity excess from K on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    (K) _____________

    Step 2.10: Total debt amount (J + ZC + K)

    =_____________

    This is the entity's total debt amount. You must now work out the entity's adjusted on-lent amount at step 3. The lesser of the total debt amount and the adjusted on-lent amount is the entity's safe harbour debt amount.

    See also:

    • Worked example of calculations for a non-ADI financial inward investment vehicle.

    Calculating K: The average associate entity excess amount for the total debt amount

    Table 32: Non-ADI financial inward investment vehicle's step 2A and Worksheet 24: Non-ADI financial inward investment vehicle's step 2A set out how to calculate the amount at K in Worksheet 23: Non-ADI financial inward investment vehicle's step 2 – the average associate entity excess amount. If the entity does not have any associate entities that are non-ADI inward investment vehicles or non-ADI inward investors, do not complete this step and show zero at K on Worksheet 23: Non-ADI financial inward investment vehicle's step 2.

    The associate entity excess amount is the sum of two amounts:

    • a premium excess amount – see steps 2A.1 to 2A.3
    • an attributable safe harbour excess amount – see steps 2A.4 to 2A.10.

    The associate entity excess amount is calculated on each of the investing entity's measurement days for each associate entity. For example, if the investing entity uses the opening and closing balances measurement method, it must calculate its associate entity excess amount as at the opening day and closing day of the income year.

    The positive amounts are added together and divided by the number of measurement days to calculate the average associate entity excess amount. Negative amounts are disregarded because a negative associate entity excess amount for one associate entity does not reduce a positive associate entity excess amount for another associate entity.

    See also:

    Explanation: Calculate the associate entity excess amount – for the total debt amount

    If the entity has more than one associate entity, repeat steps 2A.1 to 2A.12 for each associate entity on each of the investing entity's measurement days. The associate entity must be a non-ADI subject to the thin capitalisation rules.

    Table 32: Non-ADI financial inward investment vehicle's step 2A

    Steps

    Comments

    Step 2A.1: Calculate, on a particular measurement day, the value of the entity's associate entity equity attributable to the associate entity, less the value of any debt interests issued to the investing entity by the associate entity.

    Insert this amount at L on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This is the value, on a measurement day, of the equity the entity has invested in its associate entity. This excludes debt interests that may be included in associate entity equity.

    Step 2A.2: Calculate, on the measurement day, the value of the associate entity's equity capital attributable to the entity, less the value of equity interests held by the investing entity that are controlled foreign entity equity for the investing entity.

    Insert this amount at M on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This is the value, on a measurement day, of the associate entity's equity capital attributable to the investing entity

    This is measured by the associate entity in accordance with the accounting standards

    Step 2A.3: Calculate the premium excess amount by deducting the amount at M from the amount at L and multiplying the result by 15/16

    Insert the result at N on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

     

    Step 2A.4: Calculate the associate entity's safe harbour debt amount on the measurement day as if the period consisted of one day only

    Insert this amount at P on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    The safe harbour debt amount must be calculated for the associate entity on a measurement day. If the associate entity is:

    If the associate entity is an:

    • inward investor, complete the calculations in step 2 of 'Non-ADI general inward investor' for the associate entity
    • inward investment vehicle, complete the safe harbour debt calculation in step 2 of 'Non-ADI general inward investment vehicle' for the associate entity
     

    Step 2A.5: Calculate, on the measurement day, the value of the associate entity's adjusted average debt as if the period consisted of one day only

    Insert this amount at Q on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    You must also work out the associate entity's adjusted average debt on a measurement day

    Step 2A.6: Deduct the amount at Q from the amount at P

    Insert the result at R on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    Taking the adjusted average debt Q away from the safe harbour debt amount P gives the associate entity's excess borrowing capacity on a measurement day. If the associate entity has exceeded its safe harbour debt amount, this amount will be negative and is treated as zero

    Step 2A.7: Calculate, on the measurement day, the sum of all of the following:

    • the value of the associate entity's equity capital attributable to the investing entity
    • the value of the debt interests issued to the investing entity by the associate entity  
      • that are on issue
      • of which no part forms part of the associate entity's cost-free debt capital
      • that do not give rise to costs covered by paragraph 820-40(1)(a)
       
    • the value of the debt interests issued to the investing entity by the associate entity that  
      • are on issue
      • give rise to costs covered in paragraph 820-40(1)(a) but those costs are not deductible from the associate entity's assessable income in any income year
       

    Insert the result at S on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This works out the value of the associate entity's equity capital (including certain debt interests) attributable to the investing entity on a measurement day

    Step 2A.8: Calculate, on the measurement day, the sum of all of the value of all the:

    • associate entity's equity capital
    • debt interests issued by the associate entity  
      • that are on issue
      • of which no part forms part of the associate entity's cost-free debt capital
      • that do not give rise to costs covered by paragraph 820-40(1)(a)
       
    • debt interests issued by the associate entity that
      • are on issue
      • give rise to costs covered by paragraph 820-40(1)(a) but those costs are not deductible from the associate entity's assessable income in any income year
       

    Insert this amount at T on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This works out the value of the associate entity's total equity capital (including certain debt interests) on a measurement day

    Step 2A.9: Divide the amount at S by the amount at T. Insert the result at U on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This works out the proportion of the associate entity's equity capital attributable to the investing entity on a measurement day

    Step 2A.10: Calculate the entity's attributable safe harbour excess amount by multiplying the amount at R (the associate entity's excess capacity) by the amount at U (the proportion of equity capital attributable to the investing entity). Insert the result at V on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This applies the proportion worked out in step 2A.9 to the associate entity's excess borrowing capacity to work out the amount of that excess capacity that can be attributed to the investing entity

    Step 2A.11: Calculate the entity's associate entity excess amount by adding the amounts at N - premium excess amount - and V - attributable safe harbour excess amount

    Insert the result at W on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    This is the associate entity excess amount for a single associate entity on a measurement day of the investing entity

    Step 2A.12: If the entity has only one associate entity, transfer any positive amount at W to X on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A. Otherwise, repeat steps 2A.1 to 2A.11 for each associate entity. Then add all positive results at W and insert at X on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    The associate entity excess amount must be worked out for each associate entity on a measurement day. Add all the positive associate entity excess amounts together to get the total associate entity excess amount on any particular measurement day. If the entity has only one associate entity, the amount at W will be the same as the amount at X, provided X is positive. If X is negative, it is disregarded

    Step 2A.13: Calculate X (the total associate entity excess amount - steps 2A.1 to 2A.12) on each other measurement day

    The associate entity excess amount for all associate entities is calculated on each of the investing entity's measurement days

    Step 2A.14: Calculate the entity's average associate entity excess amount by adding the results at X for each measurement day and divide by the number of measurement days. Insert the result at K on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    The results are added together and divided by the number of measurement days to get the average associate entity excess amount

    Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    Steps

    $

    Step 2A.1: Investing entity's associate entity equity on a measurement day

    (L) _____________

    Step 2A.2: Associate entity's equity capital attributable to investing entity on a measurement day

    (M) _____________

    If M is negative it is taken to be nil

    Step 2A.3: Premium excess amount
    (L - M)   15/16

    (N) ____________

    N may be a negative amount

    Step 2A.4: Associate entity's safe harbour debt amount on a measurement day

    (P) _____________

    Step 2A.5: Associate entity's adjusted average debt on a measurement day

    (Q) _____________

    Step 2A.6: PQ

    (R) _____________

    If R is negative, it is taken to be zero

    Step 2A.7: Associate entity's equity capital attributable to investing entity on a measurement day

    (S) _____________

    Step 2A.8: Associate entity's total equity capital on a measurement day

    (T) _____________

    Step 2A.9: S   T

    (U) _____________

    Step 2A.10: Attributable safe harbour excess amount (R X U)

    (V) ____________

    Step 2A.11: Associate entity excess amount on a measurement day for one associate entity (N + V)

    (W) _____________

    Step 2A.12: Associate entity excess amount on a measurement day for all associate entities - the sum of positive results at W

    Now calculate the associate entity excess amount for all associate entities on the investing entity's other measurement days – see step 2A.13

    (X) _____________

    Step 2A.14: The average value of the associate entity excess amount - the sum of results at X divided by the number of measurement days

    = (K) ____________

    Transfer this amount to K on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    See also:

    • Worked example of calculations for a non-ADI financial inward investment vehicle.

    Table 33: Non-ADI financial inward investment vehicle's step 3

    Steps

    Comments

    Step 3.1: Transfer the amount from E on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 to E on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This is the average value of assets. This amount has already been worked out at E on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 (step 2.1) and can be transferred directly from there

    Step 3.2: Transfer the amount from MM on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 to MM on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This is the average value of the entity's excluded equity interests. This amount has already been worked out at MM on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 (step 2.1A) and can be transferred directly from there

    Step 3.3: Transfer the amount from F on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 to F on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This is the average value of associate entity equity. This amount has already been worked out at F on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 (step 2.3) and can be transferred directly from there

    Step 3.4: Transfer the amount from G on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 to G on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This is the average value of non-debt liabilities. This amount has already been worked out at G on Worksheet 23: Non-ADI financial inward investment vehicle's step 2 (step 2.4) and can be transferred directly from there

    Step 3.5: Calculate the average value of the entity's on-lent amount

    Insert the amount at OA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This reduces Australian assets by the value of the entity's on-lending business

    Step 3.6: Calculate the net Australian non-lending assets funded by debt and equity

    This is the result of
    E - MM - F - G - OA

    Insert the result at Y on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    The amount at Y represents the net Australian non-lending assets funded by debt and equity

    Step 3.7: Multiply the amount at Y by 3/5

    Insert the result at Z on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    Multiplying the amount at Y by 3/5 reflects the debt to equity ratio of 1.5:1 applied to the non-lending business

    Step 3.8: Transfer the average value of the entity's on-lent amount from step 3.4

    Insert the amount at OA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This is the same amount calculated in step 3.4

    This adds back the on-lent amount

    Step 3.9: Transfer the amount from B on Worksheet 22: Non-ADI financial inward investment vehicle's step 1 to B on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    This is the average value of associate entity debt. This amount has already been worked out at B on Worksheet 22: Non-ADI financial inward investment vehicle's step 1 (step 1.2 ) and can be transferred directly from there. This is also the same amount at B on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    Step 3.10: If the entity does not have any associate entities that are non-ADIs and subject to the thin capitalisation rules, insert 0 (zero) at AA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3. Otherwise, calculate the entity's average associate entity excess amount – see Worksheet 26: Non-ADI financial inward investment vehicle's step 3A. Transfer the amount at AA on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A to AA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    Broadly, the associate entity excess amount is the excess borrowing capacity of any associate entity that is either a non-ADI inward investment vehicle or a non-ADI inward investor. It also recognises any premium paid for the investment in an associate entity. This amount is worked out in step 3A at AA on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    If the entity does not have any associate entities that are non-ADIs and subject to the thin capitalisation rules, the average associate entity excess amount is zero

    Step 3.11: Calculate the entity's adjusted on-lent amount. This is Z + OA - B + AA

     

    Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    Steps

    $

    Step 3.1: Average assets from E on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    (E) _____________

    Step 3.2: Average excluded equity interests from MM on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    (MM) ____________

    Step 3.3: Average associate entity equity from F on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    (F) _____________

    Step 3.4: Average non-debt liabilities from G on Worksheet 23: Non-ADI financial inward investment vehicle's step 2

    (G) _____________

    Step 3.5: Average on-lent amount

    (OA) ____________

    Step 3.6: EMM - F - G - OA

    (Y) _____________

    If Y is negative, it is taken to be zero.

    Step 3.7: Y   3/5

    (Z) _____________

    Step 3.8: Average on-lent amount from step 3.4

    (OA) ____________

    Step 3.9: Average associate entity debt from B on Worksheet 22: Non-ADI financial inward investment vehicle's step 1

    (B) _____________

    Step 3.10: Average associate entity excess from AA on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    (AA) ____________

    Step 3.11: Adjusted on-lent amount
    (Z + OA - B + AA)

    =_____________

    This is the entity's adjusted on-lent amount. The entity's safe harbour debt amount is the lesser of the total debt amount (step 2) and the adjusted on-lent amount.

    If the entity's adjusted average debt is equal to or less than the safe harbour debt amount, the entity is not disallowed any debt deductions under the thin capitalisation rules. You do not have to complete any more calculations.

    However, if the entity's adjusted average debt is more than the safe harbour debt amount, you can choose to calculate an arm's length debt amount for the entity under step 4 or the worldwide gearing debt amount under step 5. If you do not want to calculate an arm's length debt amount or worldwide gearing debt amount, you can use your safe harbour debt amount as your maximum allowable debt and debt deductions will be disallowed on this basis – see step 6.

    See also:

    • Worked example of calculations for a non-ADI financial inward investment vehicle.

    Calculating AA: The associate entity excess amount - for the adjusted on-lent amount

    Table 34: Non-ADI financial inward investment vehicle's step 3A and Worksheet 26: Non-ADI financial inward investment vehicle's step 3A set out how to calculate the amount at AA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3 – the associate entity excess amount.

    If the entity does not have any associate entities that are non-ADI inward investment vehicles or non-ADI inward investors do not complete this step and show zero at AA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3.

    Step 3.10 is the equivalent of step 2.9 in the total debt amount calculation. The only difference is in the premium excess amount calculation. The premium excess amount is worked out by applying the gearing ratio of 1.5:1 to the premium excess rather than the gearing ratio of 15:1. The attributable excess amount will be exactly the same and can be transferred directly from Worksheet 24: Non-ADI financial inward investment vehicle's step 2A.

    See also:

    Explanation: Calculate the average associate entity excess amount for the adjusted on-lent amount

    If the entity has more than one associate entity, repeat steps 3A.1 to 3A.6 for each associate entity on each of the investing entity's measurement days. The associate entity must be a non-ADI subject to the thin capitalisation rules.

    Table 34: Non-ADI financial inward investment vehicle's step 3A

    Steps

    Comments

    Step 3A.1: Transfer the amount at L on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A to L on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A.

    This is the value, on a particular measurement day, of the associate entity equity attributable to the associate entity, excluding debt interests. This amount has already been worked out at L on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A (step 2A.1) and can be transferred directly from there.

    Step 3A.2: Transfer the amount at M on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A to M on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    This is the value, on a particular measurement day, of the associate entity's equity capital attributable to the investing entity. This amount has already been worked out at M on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A (step 2A.2) and can be transferred directly from there

    Step 3A.3: Calculate the premium excess amount by deducting the amount at M from the amount at L and multiplying the result by 3/5.

    Insert this result at BB on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

     

    Step 3A.4: Transfer the amount at V on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A to V on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    This is the attributable safe harbour excess amount on a particular measurement day. This amount has already been worked out at V on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A (step 2A.10) and can be transferred directly from there

    Step 3A.5: Calculate the entity's associate entity excess amount by adding the amounts at BB – premium excess amount, and V – attributable safe harbour excess amount

    Insert the result at CC on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    This is the associate entity excess amount for a single associate entity on a measurement day of the investing entity

    Step 3A.6: If the entity has only one associate entity, transfer any positive amount at CC to DD on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A. Otherwise, repeat steps 3A.1 to 3A.5 for each associate entity. Then add all positive results at CC and insert at DD on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    The associate entity excess amount must be worked out for each associate entity on a measurement day. Add all the positive associate entity excess amounts to get the total associate entity excess amount on any particular measurement day. If the entity has only one associate entity, the amount at DD will be the same as the amount at CC, provided DD is positive. If DD is negative, it is disregarded

    Step 3A.7: Calculate DD – the total associate entity excess amount, steps 3A.1 to 3A.6 – on each other measurement day

    The associate entity excess amount is calculated on each of the investing entity's measurement days

    Step 3A.8: Calculate the entity's average associate entity excess amount by adding the results at DD for each measurement day and divide by the number of measurement days

    Insert the result at AA on Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    The results are added together and divided by the number of measurement days to get the average associate entity excess amount

    Worksheet 26: Non-ADI financial inward investment vehicle's step 3A

    Steps

    $

    Step 3A.1: Investing entity's associate entity equity on a measurement day from L on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    (L) ____________

    Step 3A.2: Associate entity's equity capital attributable to investing entity on a measurement day from M on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    (M) ___________

    If M is negative it is taken to be nil

    Step 3A.3: Premium excess amount
    (L - M)   3/5

    (BB) __________

    BB may be a negative amount

    Step 3A.4: Attributable safe harbour excess amount from V on Worksheet 24: Non-ADI financial inward investment vehicle's step 2A

    (V) ____________

    Step 3A.5: Associate entity excess amount on a measurement day for one associate entity (BB + V)

    (CC) __________

    Step 3A.6: Associate entity excess amount on a measurement day for all associate entities – the sum of positive results at CC

    (DD) __________

    Now calculate the associate entity excess amount for all associate entities on the investing entity's other measurement days – step 3A.7

     

    Step 3A.8: The average value of the associate entity excess amount the sum of results at DD divided by the number of measurement days

    =(AA) ________

    Transfer this amount to AA on Worksheet 25: Non-ADI financial inward investment vehicle's step 3

    See also:

    Worked example of calculations for a non-ADI financial inward investment vehicle.

    Last modified: 09 Mar 2016QC 48275