Did you know that your browser is out of date?
For the best experience we recommend upgrading to the latest version of these supported browsers:
I wish to continue viewing on my unsupported browser
For the best experience we recommend upgrading to the latest version of these supported browsers:
I wish to continue viewing on my unsupported browser
A global machinery industry OEM requested assistance in connection with an ongoing IRS audit of its transfer pricing between its US subsidiary and headquarters operations in Asia.
After conducting a thorough review of the company's value chain serving its North American business, including an examination of the functions and risks undertaken by the affiliated entities serving this business and their relative contributions of tangible and intangible property, NERA's economists advised the company to adopt a residual profit split method approach to determining and testing arm's length profits in each jurisdiction.
With NERA's assistance, the company developed and implemented a transfer pricing model (TPM), which included adaptation of financial reporting systems to provide real-time indications of compliance with the TPM on a budget basis over the course of the fiscal year and valuation procedures to determine intercompany royalties and pricing margins.