Determination of Crisis Effects for Benchmark Studies

How you can take crisis-related losses into account in your transfer pricing methodology.

The corona crisis also makes it more difficult for many companies to determine transfer prices. One reason for this is the lack of models to take into account the effects of the losses that are expected in many cases. European financial data for the year 2020 will not be available until the end of 2021 at the earliest. 

Use alternative approaches that allow you to adjust your transfer prices already today in order to achieve arm’s length results that take into account the effects of the crisis! To this end, our experts have developed three methods that, individually or in combination, offer valuable support in determining transfer prices: 
- Financial Backdate (calculatory "backdating" of the financial figures to past crisis periods)
- Data simulation (sampling based on large amounts of data and simulation of crisis effects for smaller comparison groups).  
- Regression analysis (modelling of statistical relationships between turnover and profitability based on sector or branch-specific data)

Our scope of services includes for all three methods
- a memorandum summarizing the (statistical) approaches, 
- the study results of the statistical models, 
- Elaboration supporting the approach from a German and an OECD transfer pricing perspective. 

Further information on the methods and our fees can be found under the tab "Payment and engagement terms". Simply arrange a free phone call with us. Click on "Arrange initial consultation" and leave your contact details and availability. We will get back to you as soon as possible.

Our offer includes:
  • Free initial information by telephone
  • Explanation of our approaches and tools
  • If you're interested: Agreement on the next steps

How you can take crisis-related losses into account in your transfer pricing methodology.

The corona crisis also makes it more difficult for many companies to determine transfer prices. One reason for this is the lack of models to take into account the effects of the losses that are expected in many cases. European financial data for the year 2020 will not be available until the end of 2021 at the earliest. 

Use alternative approaches that allow you to adjust your transfer prices already today in order to achieve arm’s length results that take into account the effects of the crisis! To this end, our experts have developed three methods that, individually or in combination, offer valuable support in determining transfer prices: 
- Financial Backdate (calculatory "backdating" of the financial figures to past crisis periods)
- Data simulation (sampling based on large amounts of data and simulation of crisis effects for smaller comparison groups).  
- Regression analysis (modelling of statistical relationships between turnover and profitability based on sector or branch-specific data)

Our scope of services includes for all three methods
- a memorandum summarizing the (statistical) approaches, 
- the study results of the statistical models, 
- Elaboration supporting the approach from a German and an OECD transfer pricing perspective. 

Further information on the methods and our fees can be found under the tab "Payment and engagement terms". Simply arrange a free phone call with us. Click on "Arrange initial consultation" and leave your contact details and availability. We will get back to you as soon as possible.

  • Structured Approach
  • Expert team with several years of experience in benchmarking
  • Documentation of the approach

We have grouped our services into packages, the use of which we charge a flat-rate package price. The costs vary depending on the approach you wish to take. The fee amounts and package prices are net amounts and are increased by the statutory VAT.

Financial Backdate: Current benchmarks are based on pre-recession financial data and therefore do not provide sufficient guidance for setting arm's length transfer prices during a crisis. By "backdating" the financial figures to past times of crisis, you can obtain a realistic representation in the context of a global economic crisis. Fee: 1.500 Euro.

– Data Simulation: Benchmark studies are usually based on a small number of comparable companies in the "final set", from which a range of arm's length prices and margins is derived. Such small data sets have a higher statistical sensitivity for special effects due to the higher dispersion compared to large data sets. It can be assumed that large data sets tend to underestimate crisis effects. With our database simulation we draw samples based on large data sets and can thus simulate crisis effects even for smaller comparison groups. As a result, we obtain a final set of comparable companies whose financial figures take crisis effects into account. Fee: 4.000 Euro

Package Financial Backdate + Data Simulation: Fee: 4.950 Euro.

– If required, we supplement Financial Backdate and Data Simulation with a regression analysis to empirically determine correlations and interdependencies between individual financial data. This will involve accessing a large amount of sector or industry-specific data to model a statistical correlation between turnover and profitability. Fee from 5.000 Euro.

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