Arm's length price determination triggers recomputation of prior years' income when the transfer pricing option is validated. Where an arm's length price is determined for an international or specified domestic transaction and the Transfer Pricing Officer has validated an assessee's option for two consecutive previous years, the Assessing Officer must recompute the assessee's total income for those two years by amending the assessment order or intimation to conform with the Transfer Pricing Officer's determined arm's length price and by taking account of any dispute resolution directions, within the prescribed three month recomputation timeframe tied to completion or issuance of the assessment or intimation.