Facebook, Inc. & Subsidiaries v. Commissioner reveals how companies value intangible assets in cost-sharing arrangements and constitutes a landmark case. The court upheld the IRS’s 2009 temporary regulations and relied on the income method to value Facebook’s platform contributions, rejecting overly optimistic forecasts and adjusting key financial assumptions. The ruling strengthens the IRS’s position on transfer pricing, highlights the need for sound economic analysis, and shows both convergence and divergence with OECD TPG.
