Transfer Pricing of Intangible Assets for American Multinationals: Complicated problems when converting to IFRS

• In Event: Management Accounting 1

Abstract

As American multinational companies (MNCs) switching into the International Financial Reporting Standards (IFRS) from the U.S. generally accepted accounting principles (GAAP), many problems are created in choosing the appropriate transfer pricing method of intangible assets to achieve their global strategic objectives. Moreover, the use of e-commerce transactions for the transferred services and intangible assets make the problems more complicated. The purpose of this research paper are threefold: (a) to discuss the convergence from the US-GAAP into the IFRS and look into the areas where the conflict issues exist when the convergence is complete, (b) to identify the impact of the convergence into the IFRs on the selected transfer pricing method and (c) to provide American MNCs with key points and recommendations to help them overcome or alleviate the potential problems of switching to the use of the IFRS and, at the same time, guide them to reach their transfer pricing strategic objectives.

Author

• Wagdy M Abdallah, Seton Hall University