Economic Benchmarking and Comparable Company Analysis
The Valuation Group provides benchmarking and comparable company analysis for transfer pricing matters involving inter-company services, royalties, related-party transactions, profit levels, operating margins, asset transfers, and cross-border business structures.
Our work supports companies, CPAs, tax advisors, attorneys, CFOs, and advisory teams that need market evidence and economic support for related-party pricing conclusions.
Why The Valuation Group
Benchmarking analysis must connect market evidence to the transaction being reviewed. The analysis should consider the functions performed, assets used, risks assumed, industry conditions, geographic markets, financial performance, comparability, and the economic basis for the pricing conclusion.
Our benchmarking work is designed to make the market evidence usable: identifying relevant comparisons, testing comparability, reviewing financial measures, and tying the selected data to the pricing question.
We perform comparable company analysis to support transfer pricing positions involving operating margins, profit levels, service charges, distribution returns, management fees, and other related-party arrangements.
Our analysis may address company selection, industry classification, financial performance, functional comparability, risk profile, geographic considerations, revenue scale, profitability measures, and the reliability of available market data.
Inter-company service arrangements may require support for service fees, markups, shared service charges, administrative fees, technical service fees, professional service fees, and management charges.
The Valuation Group analyzes the services provided, benefit received, cost base, markup, comparable data, and economic support for the charge.
Benchmarking may also be required for royalty arrangements involving patents, trademarks, trade secrets, technology, software, brands, proprietary processes, and other intangible assets.
Our work may address royalty rates, royalty bases, license terms, useful life, market evidence, profitability, risk, and the commercial benefit associated with the intellectual property.
Benchmarking analysis often becomes part of transfer pricing documentation, tax advisor work papers, internal review files, audit response materials, or advisory memoranda.
We prepare analysis and supporting schedules designed to help professional teams explain the comparable data considered and the reasoning behind the pricing conclusion.
Related Transfer Pricing Issues
Transfer Pricing Documentation
Benchmarking analysis often supports broader documentation of inter-company transactions, pricing methods, comparable data, and economic assumptions.Inter-company Services Pricing
Service arrangements may require benchmarking of markups, cost allocations, service fees,and benefit received.
Inter-company Royalty & IP Licensing Analysis
Royalty arrangements may require comparable license review, royalty rate analysis, and support for the economic value of intangible asset use.Transfer Pricing
Audit Support
Benchmarking conclusions may need to be reviewed, organized, explained, or defended when related-party pricing
is questioned.
