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28 Va. Tax Rev. 79 (2008-2009)
Value in the Eye of the Beholder: The Valuation of Intangibles for Transfer Pricing Purposes

handle is hein.journals/vrgtr28 and id is 81 raw text is: VALUE IN THE EYE OF THE BEHOLDER: THE VALUATION OF INTANGIBLES FOR TRANSFER PRICING PURPOSES Yariv Brauner TABLE OF CONTENTS 1. INTRODUCTION ........................................................................... 81 II. INTANGIBLES ARE DIFFERENT AND IMPORTANT ................. 85 A. Why Transfer Pricing for Intangibles ............................... 86 B. The Uniqueness of Intangibles .......................................... 87 1. Why Are Intangibles Difficult to Valuate? ............... 87 2. Primary Value Drivers and Value Detractors ........... 89 C. Intangibles and M NEs ........................................................ 92 III. TRANSFER PRICES AND THE VALUATION OF INTANGIBLES .... 95 A. The Arm's Length Standard .............................................. 96 1. B ackground .................................................................. 96 2. U niversality .................................................................. 99 3. Commensurate with Income .......................................... 100 4. Tax Policy Implications of the Arm's Length Stan dard ................................................................................. 102 B. The M arket Approach .......................................................... 104 1. The Market Approach to Valuation in General .......... 104 2. The Market Approach as Applied to Valuation of Intangibles for Transfer Pricing Purposes ......................... 107 C. The Cost Approach to Valuation ......................................... 109 1. The Cost Approach in General ...................................... 109 . Associate Professor of Law, University of Florida, Levin College of Law. I thank Lawrence Lokken, Paul McDaniel, Lauren O'Dower for their helpful comments and assistance. All mistakes and inaccuracies are mine.