The accounting basis for determining the distributable profits in the VIF calculation should be the local statutory (regulatory) reporting basis. However, for the purpose of consolidation of the results at group level, certain countries’ EV results will also need to be calculated under Hong Kong or Bermuda regulatory reserving basis and capital requirements.

\(VIf_t=\sum\nolimits_{t>T}{\dfrac{De_t}1_rdr_t-t}}-Rc_t\)

where DE = Distributable Earnings, RDR = Risk Discount Rate, RC = Required Capital