TP Methods on CompPress | Transfer Pricing Resources

Intercompany Loans: The Arm's Length Framework and Accurate Delineation

Wed, 24 Sep 2025 00:00:00 +0000

Related reading (Comp-Press resources page): This is the anchor article in a cluster on intercompany loans. It is supported by Debt Capacity and Borrower Analysis: How Much Debt Is Arm’s Length?, Credit Rating for Intercompany Loans: Standalone Ratings, Implicit Support, and the Rating Build, and Interest Rate Benchmarking for Intercompany Loans: CUP Approaches and Yield Construction. The full workflow is drawn together in the flagship guide How to Run an Intercompany Loan Benchmarking Analysis: A Step-by-Step Guide.

FAR Analysis in Transfer Pricing: Functions, Assets, and Risks Explained

Fri, 05 Jun 2026 00:00:00 +0000

Every transfer pricing study starts with a functional analysis. The industry calls it FAR: functions, assets, risks. It answers the question that everything else depends on: what does each entity in the transaction actually do, what does it use, and what does it risk?

The characterization that comes out of the FAR analysis determines the transfer pricing method, the profit level indicator, and the benchmarking search criteria. A FAR that says “limited-risk service provider” leads to TNMM/CPM with net cost plus markup. A FAR that says “full-risk entrepreneur” leads to a completely different analysis. The rest of the study follows from this step. If it is wrong, everything built on top of it is wrong too.

Transfer Pricing Methods Explained: How to Choose the Right One

Fri, 05 Jun 2026 00:00:00 +0000

There are five accepted transfer pricing methods. Three are traditional transaction methods that compare prices or gross margins. Two are transactional profit methods that compare net profitability. Every transfer pricing textbook covers all five at equal length. This article does not, because in practice, they are not equally important.

TNMM/CPM is the method applied in the vast majority of benchmarking studies for routine intercompany transactions: services, distribution, contract manufacturing. If your company has a subsidiary providing services to a related entity, TNMM/CPM is almost certainly the right method. The question is not which method to use. The question is which profit level indicator and which comparables.

What Is a Transfer Pricing Study? Scope, Process, and Deliverables

Fri, 05 Jun 2026 00:00:00 +0000

A transfer pricing study, sometimes called transfer pricing documentation, analyzes whether the prices charged between related entities within a multinational group are consistent with the arm’s length principle. The term covers everything from a single-entity benchmarking report to a full master file and local file package across dozens of jurisdictions.

Most practitioners know what a study is. The more useful questions are: what separates a study that holds up on audit from one that does not, what does the process actually look like, and how much should it cost? That is what this article covers.