Global Electronics Manufacturer

The Situation

NERA economists have advised the client on several rounds of Advanced Pricing Agreements with tax authorities.

NERA's Role

NERA has developed transfer pricing policies and implemented appropriate arm's length pricing methods for this client. Economic and analytic methodologies were developed to address marketing intangibles, functional and capital intensity, and business risk comparability issues.

The Result

In particular, NERA has implemented innovative pricing methodology that fully reflects the market risks the firm was facing, such as the residual profit split method with foreign exchange risk adjustment mechanism.