Ex ante analysis

A transfer pricing analysis prepared before the documentation obligation arises.

Under the ex ante approach, the terms of a transaction are set on the basis of the information available at the time it is entered into, rather than on the basis of results known only after the end of the year. The opposite is ex post analysis, which is based on actual data. The distinction matters when assessing whether the taxpayer acted reasonably at the time the price was set, and in the context of transfer pricing adjustments. More on the methodology in the article on transfer pricing analysis.