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 nonADI entity subject to the thin capitalisation rules.
Table 12: NonADI general outward investor'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 M on Worksheet 4: NonADI general outward investor's step 2A. 
This is the value, on a measurement day, of the equity the entity has invested in its associate entity. This excludes any 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 equity interests the investing entity holds in its associate 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 N on Worksheet 4: NonADI general outward investor's step 2A 
This is the value, on a measurement day, of the associate entity's equity capital attributable to equity interests the investing entity holds in its associate entity. This excludes the value that represents controlled foreign entity equity for 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 N from the amount at M and multiplying the result by 3/5 Insert the result at P on Worksheet 4: NonADI general outward investor'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. If the associate entity is a financial entity, it is treated as a general entity for these purposes Insert this amount at Q on Worksheet 4: NonADI general outward investor's step 2A 
The safe harbour debt amount must be calculated for the associate entity on a measurement day. If the associate entity is an: 
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. Again, the associate entity is always treated as a general entity Insert this amount at R on Worksheet 4: NonADI general outward investor'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 R from the amount at Q Insert the result at S on Worksheet 4: NonADI general outward investor's step 2A 
Taking the adjusted average debt (R) away from the safe harbour debt amount (Q) 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 the following values:
Insert the result at T on Worksheet 4: NonADI general outward investor'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 the following values:
Insert the result at U on Worksheet 4: NonADI general outward investor'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 T by the amount at U. Insert the result at V on Worksheet 4: NonADI general outward investor'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 S by the amount at V, where:
Insert the result at W on Worksheet 4: NonADI general outward investor'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
Insert the result at X on Worksheet 4: NonADI general outward investor'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 X to Y on Worksheet 4: NonADI general outward investor's step 2A. Otherwise, repeat steps 2A.1 to 2A.11 for each associate entity. Then add all positive results at X and insert at Y on Worksheet 4: NonADI general outward investor'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 Y 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; that is, 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 L on Worksheet 3: NonADI general outward investor'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 4: NonADI general outward investor's step 2A
Steps 
$ 

Step 2A.1: Investing entity's associate entity equity on a measurement day 
(M) __________ 
Step 2A.2: Associate entity's equity capital attributable to investing entity's equity interests on a measurement day 
(N) __________ If N is negative, it is taken to be nil 
Step 2A.3: Premium excess amount 
(P) __________ P may be a negative amount 
Step 2A.4: Associate entity's safe harbour debt amount on a measurement day 
(Q) __________ 
Step 2A.5: Associate entity's adjusted average debt on a measurement day 
(R) __________ 
Step 2A.6: Q – R 
(S) __________ If S is negative, it is taken to be nil 
Step 2A.7: Associate entity's equity capital attributable to investing entity on a measurement day 
(T) __________ 
Step 2A.8: Associate entity's total equity capital on a measurement day 
(U) __________ 
Step 2A.9: T U 
(V) __________ 
Step 2A.10: Attributable safe harbour excess amount (S V) 
(W) __________ 
Step 2A.11: Associate entity excess amount on a measurement day for one associate entity (P + W) 
(X) __________ 
Step 2A.12: Associate entity excess amount on a measurement day for all associate entities (sum of positive results at X) Now calculate the associate entity excess amount for all associate entities on the investing entity's other measurement days – step 2A.13 
(Y) __________ 
Step 2A.14: The average value of the associate entity excess amount, that is, the sum of results at Y divided by the number of measurement days 
(L) __________ Transfer this amount to L on Worksheet 3: NonADI general outward investor's step 2 
See also:
 Worked example of calculations for a nonADI general outward investor.