Valuation of Intangibles in Transfer Pricing

About the Course: This session provides an intense review of IRS statutes that impact the valuation of intangibles in transfer pricing. The program begins with a ‘plain English’ explanation of why patent valuation professionals should be aware of transfer pricing rules and when such rules should be applied. One of the world’s foremost IP transfer pricing experts imparts highly complex legal theories and case studies for applying transfer pricing rules to the valuation of intangibles. This session addresses seminal IP transfer pricing issues including: If a variety of valuation methods are employed and the results noticeably differ, should the “best” method be selected or should an average be taken? Are documents relating to the valuation analyst’s disregarded calculations discoverable by the IRS? In terms of discoverability, why must valuation analysts be careful about how they fill out their timesheets? How do databases that contain comparable licensing agreements get populated? How can large samples of comparable licenses skew imputed acceptable royalty rates? How should outliers be handled when determining acceptable royalties based on comparables? How often must projected sales be tested in transfer pricing? What are the acceptable rates of inaccuracy in forecasting? What kinds of penalties and back interest payments can be assessed when these thresholds are exceeded? How are enhancements to intangibles to be accounted for under transfer pricing rules? This course provides definitions and context to important transfer pricing issues such as: True taxable income Intangible property income Best method rule Controlled entity Comparable uncontrolled transactions Comparable profits methods Profit split methods Similar profit potential Equivalent royalty amount Course Leader: Ednaldo Silva PhD, Founder, RoyaltyStat LLC Ednaldo is an economist specializing in transfer pricing and the valuation of intangibles and has extensive experience with litigation support and as economic expert in cases involving transfer pricing controversy and Advance Pricing Agreements (“APA”) submissions. While serving as senior economic advisor at the Office of Chief Counsel, Internal Revenue Service, Ednaldo was a drafting member for the Section 482 (Transfer Pricing) Regulations and was the first economist in the APA Program. He was responsible for introducing the “Comparable [Operating] Profits” Method (CPM, TNMM under the OECD Guidelines), the “Best Method Rule,” and the Arm’s Length “Range” under the Section 482 Regulations. Ednaldo earned his Ph.D. diploma at the University of California – Berkeley, and has several publications about transfer pricing.
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