Comparable Profits Method

Comparable Profits Method

About Comparable Profits Method:

About COMPARABLE PROFIT METHOD (CPM), see comparable uncontrolled price method.

U.S. Tax Meaning

– Under US regulations CPM is a method to determine an arm's length consideration for transfers of intangible property. If the reported operating income of the tested party is not within a certain range, an adjustment will be made. In effect this method requires a comparison of the operating income that results from the consideration actually charged in a controlled transfer with the operating income of similar taxpayers that are uncontrolled.


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