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Arm's length price

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Arm's length price
The price at which a willing buyer and a willing unrelated seller would freely agree to transact or a trade between related parties that is conducted as if they were unrelated, so that there is no conflict of interest in the transaction.


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The idea is that an arm's length price will result in a more equitable distribution of profits between the buying and selling divisions.
204) In addition, these methods must produce an arm's length price that is "commensurate" with the income attributable to the intangible.
They find that arm's length prices are substantially and significantly higher than related party prices for U.
 
 
 
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