Blog

The EdgarStat Blog explores issues in transfer pricing and application of the transactional net margin method (TNMM or CPM in the US) and other enterprise profit-based methods.

Danish Tax Authority Rejects Application of Return on Assets
January 13, 2022 by Harold McClure

There are often legitimate concerns with using book value versus market value of assets in applying a Return on Assets approach in transfer pricing. While employing a Return on Costs approach may be a reliable alternative, it must also account for comparability differences in asset intensity.

Topics: Return on Assets Contract Manufacturer CAPM Financial Economics Benchmarking Asset Intensity Adjustment

Read more
Tutorial: Asset Adjustment to ROA is Unviable
August 17, 2021 by Ednaldo Silva

Dr. Ednaldo Silva illustrates why asset intensity adjustments to the Return on Assets profit indicator are redundant and unviable.

Topics: Return on Assets Asset Intensity Adjustment Profit Indicators

Read more
Tutorial: Reliability of Return on Assets as a Profit Indicator
March 09, 2021 by Ednaldo Silva

Notwithstanding its acceptance in Coca Cola Co. v. Commissioner of the IRS, Return on Assets is a controversial profit indicator to use in transfer pricing. At the very least it must be subject to economic analysis to corroborate a relationship between operating profit and operating assets.

Topics: Tutorial Return on Assets Profit Indicators tax controversy

Read more
Headquarters
EdgarStat LLC
6931 Arlington Road, Suite 580
Bethesda, Maryland, 20814-5284
USA
Customer Support
+1 (202) 558-2356
support@edgarstat.com