CFM90620 | Debt cap: gateway test: test based around period of account of the worldwide group

This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.

The period of account of the worldwide group provides a common frame of reference for the gateway test

The gateway test works by comparing the net debt of a group’s relevant group companies and group securitisation companies (CFM90240), with the gross debt of the consolidated group.

It involves a comparison of figures derived from the amounts of debt at particular set dates for the group.

In some cases, some (or even all) of a group’s relevant group companies or group securitisation companies will make up their financial statements for a different period to that of the group’s consolidated financial statements.

To ensure there is always a common frame of reference for deriving the figures that form the basis of the test, the figures are drawn from the beginning and the end of the period of account of the worldwide group.

If a relevant group company or group securitisation company has a different period of account, figures for that company are taken at dates corresponding to the period of account of the worldwide group (unless the company becomes, or ceases to be, a relevant group company or group securitisation company during that period of account).