Transfer Pricing Basics: Arm's Length, Margins & Benchmarking
Map intercompany transactions, price goods with the cost plus and resale price methods, test a distributor with TNMM profit level indicators, build the interquartile range with QUARTILE.INC, adjust to the median, allocate service fees and post the year-end true-up: 8 labs on one fictional group, following the OECD Guidelines (educational, not tax advice).
The first lesson is free — no account needed.
About this course
A transfer pricing course that tests the intercompany prices of one fictional optics group in a spreadsheet, for tax and finance staff, accounting students, auditors and controllers of multinational groups. You map who sells what to whom inside the group with SUMIFS, measure a manufacturer's mark-up and set an arm's length price with the cost plus method, work back from a distributor's resale price to its purchase price with the resale price method, calculate the operating margin, net cost plus and Berry ratio for TNMM year by year and weighted, screen twelve comparables and build the interquartile range with QUARTILE.INC and MEDIAN, test the result and calculate the adjustment to the median, allocate shared service costs with allocation keys and a 5% mark-up and post the year-end true-up. The method follows the OECD Transfer Pricing Guidelines in general terms. Educational only, not tax advice. The first lab is free.
Lessons
- Mapping Intercompany Transactions: Who Sells What to WhomFree
- The Cost Plus Method: Mark-up on the Cost Base Pro
- The Resale Price Method: Working Back from the Gross Margin Pro
- TNMM: Operating Margin, Net Cost Plus & Berry Ratio Pro
- The Comparables Set & the Interquartile Range Pro
- Testing the Result & Adjusting to the Median Pro
- Intercompany Services & Management Fees: Allocation Keys Pro
- Year-End True-Up & Its Effect on Each Entity's Profit Pro