Analysis Functional Analysis

Functional analysis is required for determining whether controlled and uncontrolled transactions are comparable while considering assets used and risks assumed by related parties.

The Functional Analysis includes nature of the transactions surrounded by the risks, facts and circumventions macro, micro, legal and business environment, transaction flows, allocation of functions and risks among the associated entities involved in the transactions.

Relevant information for the functional analysis includes:

• Organization
• Operations (History, Definition and Scope)
• Market Conditions
• Sector Analysis
• Business Strategies of the Related Parties
• Related Parties
• Details of related party transactions and contracts between related parties
• Assets owned, economic functions performed and risks faced by the related parties

 

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