SDDS Wiring-Guide

Definition:

The NAV of a consolidated group under the different GAAPs may include the net liability position of subsidiary undertakings. In practice, however, the group may have neither a legal nor a constructive obligation to vehicle the accumulated losses in situations where the financing of the subsidiaries is non-recourse to the vehicle.

In this scenario it is appropriate to make an adjustment when calculating the INREV NAV in order to recognise the group’s interest in such subsidiaries at nil or an adjusted negative amount rather than at a full net liability position, to the extent there is no intention or obligation on the vehicle to make good those losses.

The adjustment represents the positive impact on the NAV of the difference between the negative equity of the specific subsidiary and/or an adjusted negative amount. If the vehicle has granted shareholders' loans to the subsidiary, these should be taken into account.