Under the Current Exposure Method, the calculation of the counterparty credit risk charge for an individual contract is as follows:

Counterparty charge = [(RC + add-on) – C_A] x r x 8%

Where:

RC = The replacement cost,
Add-on = The amount for potential future exposure calculated according to paragraph 45 of Appendix CA-2.
C_A = The volatility adjusted collateral amount under the comprehensive approach prescribed in Paragraphs CA-4.3.3 to CA-4.3.16, or zero if no eligible collateral is applied to the transaction, and
r = The risk weight of the counterparty.