COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The elements that must be present in an intangible according to the OECD Transfer Pricing Guidelines are
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The transfer or utilization will require remuneration if it occurs between independent parties
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Must be intangible based on applicable accounting standards
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Must be registered with the official government unit that performs the administration and protection of Intellectual Property Rights
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Must meet the definition of intangible in domestic regulations where the intangible is used
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Explanation:
Detailed explanation-1: -Intangible assets are assets that do not have a physical or financial embodiment. Termed ‘intellectual assets’ in previous OECD work, intangible assets have also been referred to as knowledge assets or intellectual capital. Much of the focus on intangibles has been on R&D, key personnel and software.
Detailed explanation-2: -The OECD Transfer Pricing Guidelines provide guidance on the application of the “arm’s length principle", which represents the international consensus on the valuation, for income tax purposes, of cross-border transactions between associated enterprises.
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