Prepare Functional Analysis
The functional analysis identifies the functions, risks and assets of the controlled entities, and leads to their characterization. The purpose of a functional analysis is the gathering and organization of the facts needed to analyze intercompany prices. Assuming that the related parties have been identified, the first step in a functional analysis is to identify all the transactions between or among those related parties and to determine which are material enough to require analysis and documentation.  At the same time, all transactions with third parties that could possibly be comparable to the controlled transactions should be identified.

Prepare Financial Analysis
This section involves the analysis of detailed financial information to establish the profitability associated with the intercompany transactions. Client will provide much of the needed financial information, including:

• balance sheet and income statements
• segmented financial information, as required, and ALR will provide guidance as to how this information is to be prepared.

Prepare Economic Analysis
This section determined the appropriate transfer pricing methodologies to apply and the preparation of an economic analysis to demonstrate that the intercompany price is within an arm’s-length range.

Prepare Report
ALR will prepare a report that is intended to assist with assembling the documentation requirements set out in the specific jurisdictions.