So, After having worked in Transfer Pricing (TP) for nearly a year now, I thought it was time I posted a bit about working in Transfer Pricing, as it is an area I think that is very misunderstood.
I work in europe for a big 4 accounting firm in TP.
I think it is the belief of many people that TP involves doing compliance work, ie just filling in tax forms all day. this is VERY VERY wrong.
TP is really a fantastic area in my opinion, it is very varied and involves a lot of interesting work.
FIrstly, you learn a lot about a company, and that is the company as a whole, big large international companies, how tehy operate and their structuring. In pricing, it is very important to learn about the diferent functions and structures of the group, which is all very itneresting, you learn a lot about how they operate etc.
There is a lot of company research, to learn all of this about the company, interviews with finance departments, and other departments staff etc. Researching comparable companies and so on.
Then there is plenty of financial statement analysis, etc.
Just so people know the jist of TP, it is the pricing of contributions (goods, intangibles, services) and funds transferred between connected parties. Basically it covers all transactions that take place, but within a companies whole group.
Now the most interesting work is to do with planning. This is advising companies on structuring changes, shifting functions and risks to different locations. Such as moving Intellectual Property and changing models such as from full distributors to agents and having to value exit charges etc.
There is a lot of research in planning as well, putting together to models to see feasibility and outcomes etc of different structures.
THen there is a bit of valuation, valuing Intellectual Property such as technologies, customer lists, brand names, patents, etc. DCF models, market models, EVA and so on, all sorts of methods to justify valuations.
A typical TP day in the office could cover the following: - undertaking a comparable company search. (this involves researching the company to know its functions and risks and looking for comparable companies) - Attending client meetings - drafting function analysis (this is a complete run down of the companys operations, risks, just a whole analysis of the comapny etc). - Modelling work
Common exam routes for TP workers are either the CFA or Chartered Accountant.
So I just wanted everyone to know what TP involved, and not to rule it out as it is a very interesting area to work, and should have better exit opportunities then many think. But its sucha good job its worth staying on it for a career path. It certainly beats working audit for me, or some other finance department.
So take from it what you can.
bumpity bump
Just so people know,
I just started a fantastic project valuing intellectual property of a company, we will do DCF and market approach, to see what countries we cna move the IP to for overall savings to the company.
Should be very interesting, will have to value customer lists, other goodwill etc, besides all the R&D and brand names
Inferiority complex much?
Bit of self promotion yes!
Just been doing DCF valuations on a company pre and post structure change of it.
Great job this.
No inferiority complex at all here
For God's sake. You're chuffed about doing before and after DCF valuations?
Yes loving it as!!
What kind of exit opportunities exist in transfer pricing?
Go tell your mom about how much you love your account job.
No body else cares.
good question econ, regardless of what our friend marcus thinks, some people here are interested.
PS Marcus, YOUR mom really enjoyed it when I told her last night aobut it. She enjoyed a few other things too (wink wink, nudge nudge)
Are you going to answer it? You work in the industry right?
Only been doing it for a year so i dont know. I havent been around long enough to see anyone exit!!!
But from the work thats done, it should be possible to spin it to exit into lots of corporate finance type roles. But seeing as most people dont really know what TPers do it may be difficult.
So in answer to your quesiton im useless, I DONT KNOW!!! hehe
Learn english.
Hi balooshi,
Thank you for sharing your experience, I found it helpful as I am considering a career jump into TP myself.
Just to add a bit more to this thread - I found a relevant article on another forum,
The most important thing to keep in mind is that the IRS and world governments are increasing their scrutiny of transfer pricing, which means the field is growing. Many firms are creating new offices around the country and the demand for qualified transfer pricing professionals is really high. I get a new offer to leave every week and after each project I usually end up getting a call from the client trying to make an offer. There is a lot of money to be made in this field. Sure, it can sometimes be a little boring, but so can any job.
-Urch user id: 1981
Dr. Nick, any idea what the salaries and exit opportunities are like?
Hi econ, Check out the following thread (especially the bottom comments): http://www.wallstreetoasis.com/forums/getting-into-the-big-4-and-what-i…
Are you working in TP?
Thanks. No, I am not -- I was just curious.
Hi Balooshi, thanks for your post. It is very helpful to learn more about transfer pricing. I was wondering what kind of relevant experiences did you have prior working in transfer pricing? Thank you.
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