Factors of credit ratings for transfer pricing of loans in European conditions
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Dátum
2024
Názov časopisu
ISSN časopisu
Názov zväzku
Vydavateľ
Nakladatelství Oeconomica, Vysoká škola ekonomická : Praha
ISBN
ISSN
0032-3233
2336-8225
2336-8225
Abstrakt
In accord with international transfer pricing regulations, the borrower's creditworthiness is the main factor to be reflected in valuation of cross-border loan transactions between associated enterprises. However, trouble invariably arises for small and medium-sized enterprises that do not have an assigned credit rating. The aim of this paper is to determine the most reliable predictors of a company's credit rating for European entities facing missing rating coverage for the purpose of transfer pricing. Based on 2015-2019 data sourced from the Orbis database, the study examines key financial ratios and non-financial information that could be instrumental in reconstructing a long-term rating category of a company assigned by Moody's Investors Service. The results identify interest coverage as the most useful predictor. Therefore, a law-approved and tax-acceptable approach to pricing of financial transactions between unrated parties (i.e., without credit rating) should preferably exploit interest coverage as a link to the otherwise missing ratings.
Popis
In: Politická ekonomie : vědecký časopis : teorie, modelování, aplikace. Praha : Nakladatelství Oeconomica, Vysoká škola ekonomická, 2024. ISSN 0032-3233. Vol. 72, no. 5 (2024), pp. 727-751.
Kľúčové slová
úverové ratingy, credit ratings, transferové oceňovanie, transfer pricing
Výstup z projektu
TAČR TL05000328 Stanovení obvyklé ceny u finančních transakcí náhledem principu tržního odstupu
VEGA 1/0579/21 Výskum determinantov a paradigiem finančného manažmentu v kontexte pandémie COVID-19
Citácia
DOI
Práva a licenčné podmienky
CC BY-NC-ND Creative Commons Attribution-NonCommercial-NoDerivatives 4.0. International
info:eu-repo/semantics/openAccess
info:eu-repo/semantics/openAccess