Functional comparability governs software-service benchmarking: dissimilar companies are excluded, while related-party filters, margins and working-capital adjustments require verification.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Functional comparability governs selection of software development support service comparables. Entities undertaking enterprise transformation, software-product or diversified activities, onsite services, product development or research and development, without reliable segmental information, do not meet the benchmark for routine software development support services and are excluded. The functional profiles of two proposed comparables require fresh examination. Inclusion of another comparable depends on verification of its related-party transaction computation under the applicable filter. Weighted-average operating margins and working-capital adjustments for software development and sales and marketing support services require verification.........