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The transactional net margin method (TNMM) in transfer pricing compares the net profit margin of a taxpayer arising from a non-arm's length transaction with the net profit margins realized by arm's length parties from similar transactions; and examines the net profit margin relative to an appropriate base such as costs, sales or assets.
Such a transaction is known as an "arm's-length transaction". It is used specifically in contract law to arrange an agreement that will stand up to legal scrutiny, even though the parties may have shared interests (e.g., employer-employee) or are too closely related to be seen as completely independent (e.g., the parties have familial ties).
The valuation of a property is typically determined by an appraiser, but a better measure is an arms-length transaction between a willing buyer and a willing seller. Typically, banks will utilize the lesser of the appraised value and purchase price if the purchase is "recent" (within 1–2 years).
An FNMA loan, aka a conforming loan or Fannie Mae-backed mortgage, is a loan or mortgage that has been sold to the Federal National Mortgage Association (FNMA, or Fannie Mae) — or one that meets ...
A frequently-proposed [107] [108] alternative to arm's-length principle-based transfer pricing rules is formulary apportionment, under which corporate profits are allocated according to objective metrics of activity such as sales, employees, or fixed assets. Some countries (including Canada and the United States) allocate taxing rights among ...
Fannie Mae and Freddie Mac buy loans from lenders and repackage them into mortgage-backed securities. This benefits the mortgage market in a couple of ways. First, it lowers the risk of default ...
The BauGB defines the Verkehrswert or Marktwert (market value, both terms with identical meaning) as follows: "The market value is determined by the price that can be realized at the date of valuation, in an arm's length transaction, with due regard to the legal situation and the effective characteristics, the nature and lay of the premises or ...
Fannie Mae and Freddie Mac today are privately owned - but, due to a government bailout during the 2008 housing crisis, are under control of the Federal Housing Finance Agency.