The Comparable Profits Method (CPM) is not always the best method under the U.S. regulations, or the method most likely to be accepted by other governments. However, for many companies facing the need for transfer pricing documentation and concerned about the cost, an "entry-level" CPM comparison may be sufficient to demonstrate that prices are consistent with the arm’s length standard, or as a first-step risk assessment.

Benchmark_CPM is a proprietary service offered by ECS. It provides a standardized set of profit level indicators (PLIs) for use in CPM analyses. In providing this service, ECS uses its specialized expertise in data development to select a sample of companies based on financial and descriptive information provided by its client. Time consuming functional analyses, and the evaluation of alternative approaches, are the responsibility of the client. Benchmark_CPM also can be used to update samples from previous analyses, to evaluate the impact of different PLIs and working capital adjustments on samples developed by the IRS, and to examine the sensitivity of results to different screening criteria.

The price for the basic Benchmark_CPM service begins at $5,000. The service is available for distributors, service providers and contract manufacturers with relatively routine functions, risks and assets. To discuss the possible use of this service for your company or client, send a message to
Andrew Bostian, Yung Lee or call 202-466-7720.