Towards a New Transfer Pricing Methodology for Black Swan Events: A New Formula-Based Framework for Determining Arm's Length Pricing for Wholesale and Distribution Functions

Author(s)	CA Shivam Sharma
Country	India
Abstract	This research paper proposes a formula-based transfer pricing framework to determine arm’s-length operating profit during black swan events affecting wholesale and distribution businesses. It argues that traditional benchmarking methods and commercial databases often fail during crises because they lack real-time operational data, geographic relevance, and sensitivity to varying levels of disruption. To address this gap, the paper introduces a two-limb model: the Financial Structural Trend (FST) Score, which measures the operational impact of a crisis using internal business data, and the OP ALP formula, which computes a fair arm’s length operating profit after accounting for capacity loss, fixed cost absorption, pricing compression, and working-capital stress. By relying on audited internal records and independent transaction data, the framework seeks to reduce subjectivity, prevent manipulation, and provide a more defensible basis for transfer pricing analysis during extraordinary economic disruptions.
Keywords	Transfer Pricing, Black Swan Events, Wholesalers, OECD
Field	Mathematics > Economy / Commerce
Published In	Volume 8, Issue 3, May-June 2026
Published On	2026-06-19
DOI	https://doi.org/10.36948/ijfmr.2026.v08i03.82028

About IJFMR Fees & Payment Current Issue Publication Archive	Submit Research Paper Track Submission Status Publication Guidelines Publication Ethics Peer Review & Plagiarism	Join as a Reviewer Editors & Reviewers Reviewer Referral Program Get Reviewer Membership Certi.	Website/Journal Policies Usage Policy Content Policies Privacy Policy

Contact Us		+91-9687-828-838	editor@ijfmr.com

International Journal For Multidisciplinary Research