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Transfer reactions

Article Abstract:

Transfer pricing policies of multinational corporations increasingly figure in trade disputes. While the IRS has initiated a crackdown on US companies with foreign ownership that impose steep fines for improper transfer pricing, some US trading partners such as Japan seem to get even with reassessments in transfer prices of US multinationals. Transfer pricing involves the setting of a price for goods or services exchanged by two parties and which have crossed borders. The Organization for Economic Development has instituted some principles concerning transfer pricing, a key concept of which is the arm's-length principle in setting transfer prices.

Economic aspects, International business enterprises, Multinational corporations, Transfer pricing

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Tackling tax-related troubles

Article Abstract:

To help forecast tax liabilities on the future, particularly in asset-based valuations, it was found that providing for half of the full disposal costs is insufficient. A better assessment might use 75% of full disposal costs to determine latent income taxes. The article also states that net redundant asset value does not have to be diminished by distribution taxes for the valuation of shares. The refundable portion of Part I tax on capital gains may not have to be a variable in the determining a latent tax liability rate.

Accounting, auditing, & bookkeeping, Tax return preparation services, Income tax

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Taking a WACC at private companies

Article Abstract:

The income approach is the common method of assessing the value of businesses. An integral concept in using the income approach to assess the value of privately-held companies is the weighted average cost of capital (WACC). It is used as multiplier in determining the appropriate discount rate to use in calculating for the value of a business' total assets. Several case studies showing the use of WACC are presented.

Evaluation, Capital assets

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