Revised Moving Average versus Traditional Approach in Transfer Pricing

Setting a Target for Transfer Pricing: An Improved Application of Multiple Year Data contrasts two methods of using multiple year data to generate a transfer pricing target, the traditional approach of an updated moving average that has been commonly used in the APA program and an alternative revised moving average.  Dr. Newman demonstrates "the revised moving average is superior to the traditional approach because it is less sensitive to the volatility in annual data and eliminates the distortion associated with the drop-off effect." Click here to view and download Dr. Newman's article in the journal Transfer Pricing Focus published by the International Tax Institute.