Document ID: chunk:federal_register_of_legislation:C2014A00110:clause:1_20:p2
Version: federal_register_of_legislation:C2014A00110
Segment Type: clause
Provision Reference: sch 1 cl 20 (pt 2/3)
Character Range: 25102–27855

to the result of step 5 the average value, for that year, of the entity's *associate entity excess amount. The result of this step is the worldwide gearing debt amount.
Example: RGR Limited, a company that is an Australian entity, has a worldwide parent entity in France. RGR Limited has statement worldwide debt of $90 million and statement worldwide equity of $30 million. The result of applying step 1 is therefore 3. Dividing 3 by 4 (through applying steps 2 and 3) and multiplying the result by $100 million (which is the result of step 5 of the method statement in subsection 820‑200(2)) equals $75 million. The zero capital amount is $5 million. Adding that amount to $75 million results in $80 million. As the company does not have any associate entity excess amount, the worldwide gearing debt amount is therefore $80 million.

820‑218  Worldwide gearing debt amount—inward investor (general)
  If the entity is an *inward investor (general) for the income year, the worldwide gearing debt amount is the result of applying the method statement in this section.

      Method statement
           Step 1. Divide the entity's *statement worldwide debt for the income year by the entity's *statement worldwide equity for that year.
           Step 2. Add 1 to the result of step 1.
           Step 3. Divide the result of step 1 by the result of step 2.
           Step 4. Multiply the result of step 3 in this method statement by the result of step 4 in the method statement in section 820‑205.
           Step 5. Add to the result of step 4 the average value, for that year, of the entity's *associate entity excess amount. The result of this step is the worldwide gearing debt amount.
Example: MLO Limited, a company that is not an Australian entity, has investments in Australia. MLO Limited has statement worldwide debt of $120 million and statement worldwide equity of $40 million.
 The result of applying step 1 is therefore 3. Dividing 3 by 4 (through applying steps 2 and 3) and multiplying the result by $75 million (which is the result of step 4 of the method statement in section 820‑205) equals $56.25 million. As the average value of the company's associate entity excess amount is $4 million, the worldwide gearing debt amount is therefore $60.25 million.

820‑219  Worldwide gearing debt amount—inward investor (financial)
  If the entity is an *inward investor (financial) for the income year, the worldwide gearing debt amount is the result of applying the method statement in this section.

      Method statement
           Step 1. Divide the entity's *statement worldwide debt for the income year by the entity's *statement worldwide equity for that year.
           Step 2. Add 1 to the result of step 1.
           Step 3.