New appraisal guidelines - intra group transfers(Taxwatch (Tax news in english))
23-09-2009 13:13
Af
Hans-Henrik Nilausen
The tax authorities have issued new guidelines on appraisal of businesses and parts of businesses including appraisal of good will and other intangible assets in connection with intra group transfers.
The guidelines among other contains the tax authorities recommendations to appraisal methods and the documentation for the appraisal.
Recommendations to appraisal methods
The guidelines describes the below methods:
- DCF- method (discounted cash-flow) which is an income based method where the value is fixed based on the future income.
- EVA- method is a diversity of the DCF-method. The method is recommended as a control computation of the DCF-method.
- Multiple appraisal that according to the tax authorities can be used to substantiate an appraisal according to the DCF-method.
- Relief from royalty method that among other can be used in connection with the appraisal of intangible assets.
Recommendations to documentation
According to the guidelines the documentation shall as a starting point contain the following main issues:
- Identification of subject and demarcation of appraisal premises
- Description of the business and its business activities
- Accounts analysis and arrangement of historic accounting figures
- Appraisal method
- Documentation of the basis for the appraisal
- Computations by the appraisal and sensibility analysis
- Conclusion on the appraisal report
- Appendixes and other basis materiel for the appraisal
If the company has prepared written transfer pricing documentation part of the documentation to the appraisal can be picked up from there.
Questions to this article can be directed to Hans-Henrik Nilausen at
HHN@bdo.dk
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