Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 2/8)
Character Range: 7086342–7089049

3 the average value, for the relevant year, of the entity's *borrowed securities amount.
           Step 5. Add to the result of step 4 the average value, for the relevant year, of the *cost‑free debt capital of the entity. The result of this step is the adjusted average debt.
Note: To calculate an average value for the purposes of this Division, see Subdivision 820‑G.
 (4) The entity's *adjusted average debt does not exceed its *maximum allowable debt if the adjusted average debt is nil or a negative amount.

820‑90  Maximum allowable debt

Entity is not also an inward investment vehicle (financial)
 (1) The entity's maximum allowable debt for an income year is the greatest of the following amounts if the entity is not also an *inward investment vehicle (financial) for all or any part of that year:
 (a) the *safe harbour debt amount;
 (c) unless the entity has *worldwide equity of nil or a negative amount—the *worldwide gearing debt amount.

Entity is also an inward investment vehicle (financial)
 (2) The entity's maximum allowable debt for an income year is the greatest of the following amounts if the entity is also an *inward investment vehicle (financial) for all or any part of that year:
 (a) the *safe harbour debt amount;
 (c) unless subsection (3) applies to the entity—the *worldwide gearing debt amount.

Inward investment vehicles that are not eligible for the worldwide gearing debt amount
 (3) This subsection applies to an entity, if:
 (a) the entity has *statement worldwide equity, or *statement worldwide assets, of nil or a negative amount; or
 (b) *audited consolidated financial statements for the entity for the income year do not exist; or
 (c) the result of applying the following formula is greater than 0.5:

where:
average Australian assets of an entity is the average value, for the statement period mentioned in subsection (4), of all the assets of the entity, other than:
 (a) any assets attributable to the entity's *overseas permanent establishments; or
 (b) any *debt interests held by the entity, to the extent to which any value of the interests is all or a part of the *controlled foreign entity debt of the entity; or
 (c) any *equity interests or debt interests held by the entity, to the extent to which any value of the interests is all or a part of the *controlled foreign entity equity of the entity.
 (4) For the purposes of the definition of average Australian assets in subsection (3) the statement period is the period for which the *audited consolidated financial statements for the entity for the income year have been prepared.
 (5) For the purposes of the formula in paragraph (3)(c), if:
 (a) an amount is included in *statement worldwide