To illustrate the principles, consider this fictional FDI relationship with enterprise A as the group parent. All enterprises are assumed to be located in different countries. The group structures are as follows:
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According to the ALP, from the perspective of enterprise B, all claims on affiliated enterprises (200 MU equity investment in C, 20 MU trade credits to C, 8 MU equity investment in A) = 228 MU, plus all claims on fellow enterprises (75 MU loans to E) = 75 MU are added up (= 303 MU) and netted against the sum of liabilities derived in the same way (375 MU). In net terms, 72 MU of outward FDI are recorded (see below).
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Under the xDP, equity and debt positions of the direct investment enterprise (enterprise B) and the direct investor (enterprise A) are netted. Reverse investments are therefore taken into account. At the same time, it is also clear in this case that, depending on the country in which group headquarters are located (whether in Germany or abroad), the positions of fellow en-terprises must also be taken into account.
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