The fair transaction price of related party transactions refers to the price charged by the same or similar business activities between unrelated parties.

Resale price method

The fair transaction price of goods purchased by related parties is the price that the related parties sell to non-related parties after purchasing goods minus the gross profit of comparable non-related transactions.

Fair transaction price = resale price to non-related parties ×( 1- comparable gross profit margin of non-related transactions)

Gross profit margin of comparable unrelated transactions = gross profit margin of comparable unrelated transactions ÷ net income of comparable unrelated transactions × 100%.

Cost-plus process

The fair transaction price of related party transactions is based on the reasonable cost of related party transactions plus the gross profit of comparable unrelated party transactions. Formula:

Fair transaction price = reasonable cost of related transactions ×( 1+ cost plus rate of comparable unrelated transactions)

Comparable unrelated transaction cost plus rate = comparable unrelated transaction gross profit ÷ comparable unrelated transaction cost × 100%.

Transaction net profit method

Determine the net profit of related party transactions with the profit rate index of comparable unrelated party transactions. Profit rate indicators include ① return on assets, ② sales profit rate, ③ full cost plus rate and ④ Berry ratio.

Profit division method

According to the contribution of enterprises and their related parties to the consolidated profits of related party transactions, the amount of profits to be distributed by each enterprise is calculated. Profit division method is divided into general profit division method and residual profit division method.

(1) the general profit division method, according to the functions performed by each participant, the risks assumed and the assets used, determines the profits that each participant should obtain;

(2) The residual profit division method takes the balance of the consolidated profits of all participants in related party transactions minus the regular profits distributed to all parties as residual profits, and then distributes them according to their contributions to the residual profits.