Directional Principle

When direct investment is presented according to the directional principle, investments in the opposite direction are netted, that is, direct investments are classified as follows:

• Investments from Spain abroad = assets of Spanish parent company against foreign subsidiary – liabilities of Spanish parent company against foreign subsidiary + assets of subsidiaries against other subsidiaries of the same group, when the ultimate parent is a resident – liabilities of subsidiaries against other subsidiaries of the same group, when the ultimate parent is a resident
• Investments from abroad in Spain = liabilities of Spanish subsidiaries against foreign parent companies – assets of Spanish subsidiaries against foreign parent companies + liabilities of subsidiaries against other subsidiaries of the same group, when the ultimate parent is a no
• resident – assets of subsidiaries against other subsidiaries of the same group, when the ultimate parent is a no
• resident

The Balance of Payments and the International Investment Position. Methodological Note.