ANALYSIS: Rebalancing the Functional Analysis: Functions, Assets, and Risks
January 14, 2010 in Transfer Pricing Report
To establish price according to the arm’s-length principle, the Organisation for Economic Co-operation and Development requires an analysis of both the functions performed and risks assumed by a multinational entity. Whilst the OECD guidelines clearly indicate that assets and risks must be taken into account in establishing appropriate arm’s-length pricing, over the past 30 years one sees a subtle yet inexorable increased emphasis on the functions and less placed on the assets and risks. Enjoying this article? To continue reading you need to take out a FREE trial to the Transfer Pricing Library.
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