Financial Analysis
EQUITY, BUSINESS ENTITIES, ESTATES, INTANGIBLES, AND ECONOMIC VALUE

Special Topics:

• International Services - Federal Tax Issues
• Interest Expense Attribution (864e)
• Intercompany Transfer Pricing (482)
• Due Diligence
• Valuing Intellectual Property
• Insolvency Valuations Under IRC (108b)
• Accounting for the Impairment of Long-Lived Assets (FASB 121)
• Accounting for Acquired "In Process" Research & Development Costs (FAS 2)

Interest Expense Attribution

Arthur Consulting Group evaluates the impact of IRC §864(e).

Tax planning is crucial to the statregic positioning of any company doing business in international markets. The key word is "planning" - - evaluating the future impact of today's alternatives. One such challenge is evaluating the impact of IRC §864(e) - interest expense attribution.

Companies may choose between two bases for the allocation of interest expense for U.S. federal tax purposes: 1) the tax book value of worldwide assets, or 2) the fair market value of worldwide assets. The choice usually makes a significant difference in a company's federal tax liability, sometimes millions of dollars annually.

Businesses are turning to the proven expertise of Arthur Consulting Group to guide them through the analysis of their options and the related effects. The issues are complex, and not only depend upon how a firm values its worldwide assets, but also upon the firm's excess foreign tax credit situation, as well as its future investment and income plans. Arthur Consulting Group conducts a preminary study which models the effect of an election prior to making the choice. This inexpensive study can help you determine the potential benefits and timing of benefits before undertaking detailed valuation work.

Why Choose Arthur Consulting Group?

Arthur Consulting Group has been involved in defining the methodology employed by the Internal Revenue Service. And, because of our work with the IRS, we are viewed by them as independent and highly qualified to represent corporate clients. Since ACG has performed studies for both taxpayers and government agencies, we have first-hand knowledge of each side's viewpoints and issues.

In addition, ACG offers the following benefits:

• Commitment to professional excellence consistently achieved by applying only senior personnel to every assignment. This ensures project management continuity and downstream audit support.
• ACG works with clients in a management consulting context, helping clients to anticipate and manage the impact of their international tax planning decisions.