Delineate before you benchmark
Use accurate delineation to define the transaction before selecting a pricing method.
Accurate delineation means defining the controlled transaction from evidence, not from the file name. Start with the written terms Contracts identify the intended transaction: goods sold, services provided, license rights, pricing formula, payment timing, and risk allocation. They are the starting point. Test conduct against the contract If the contract says one entity controls inventory risk, but another entity decides volume, supplier changes, safety stock, and write-offs, the conduct matters. Transfer pricing follows what parties actually do. Map FAR and realistic alternatives Functions, assets, and risks explain value creation. Realistic alternatives explain bargaining power. Together they show whether the related-party…
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