
Tutorial: Currency Adjustments in Intercompany Financing
In this tutorial, we address comparability adjustments for differences in the currency of the tested loan to that of the comparable transactions.
In this tutorial, we address comparability adjustments for differences in the currency of the tested loan to that of the comparable transactions.
One of the most challenging transfer pricing issues regarding financial transactions is making a comparability adjustment for differences in country risk between the tested non-US borrower’s country and the comparable US borrower's country in pricing the intercompany loan interest rate.
In this tutorial we introduce you to a tool in the EdgarStat CUFT Loan Agreements Database for estimating the implied credit rating of your tested borrower using the Altman Z”-Score Model.
Intercompany financing is a growing area of focus in transfer pricing. CUFT Analytics co-founder and managing director John Hollas provides guidance on using the EdgarStat CUFT Loan Agreements Database to benchmark an arm's length range of interest rates.