IFRS will affect cost sharing arrangements
July 01, 2009
Vu Tran and Alexander Gurevich of PricewaterhouseCoopers in the US discuss how the change from US GAAP to IFRS will affect cost sharing arrangements
Cost sharing arrangements (CSAs), one of the most complex areas associated with international transfer pricing, serve as a popular financial and tax planning tool for many organisations. Financial accounting is often at the heart of these arrangements. In particular, US generally accepted accounting principles (GAAP) has historically been the financial accounting standard most often relied upon for measuring many of the elements within a CSA. As US-based multi-national organisations continue to evaluate their potential move from US GAAP to International Financial Reporting Standards (IFRS), through either continued convergence or ultimate conversion, they will need to consider how changing accounting policies may potentially impact their existing and future CSAs. The implications of IFRS on three key elements of CSAs need to be examined:
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