| APA
RECORDS AND ANNUAL REPORT |
| APA RECORDS |
| The APA Records will consist of: |
| 1. All documents listed below for inclusion
in the Annual Report, as well as all documents, notes, work papers, records,
or other writings that support the information provided in such documents.
|
| ANNUAL REPORT |
| The Annual Report will include two copies
of a properly completed APA Annual Report Summary in the form of Exhibit E
to this APA, one copy of the form bound with, and one copy bound separately
from, the rest of the Annual Report. In addition, the Annual Report will
include a table of contents and the information and exhibits identified below,
organized as follows.
|
| 1. Statements that fully identify, describe,
analyze, and explain:
|
| a. All material differences between any
of the U.S. Entities’ business operations (including functions, risks
assumed, markets, contractual terms, economic conditions, property, services,
and assets employed) during the APA Year and the description of the business
operations contained in the APA Request. If there have been no material differences,
the Annual Report will include a statement to that effect.
|
| b. All material changes in the U.S. Entities’
accounting methods and classifications, and methods of estimation, from those
described or used in Taxpayer’s request for this APA. If any such change
was made to conform to changes in U.S. GAAP (or other relevant accounting
standards), Taxpayer will specifically identify such change. If there has
been no material change in accounting methods and classifications or methods
of estimation, the Annual Report will include a statement to that effect.
|
| c. Any change to the Taxpayer notice information
in section 14 of this APA.
|
| d. Any failure to meet any critical assumption.
If there has been no failure, the Annual Report will include a statement
to that effect.
|
| e. Any change to any entity classification
for federal income tax purposes (including any change that causes an entity
to be disregarded for federal income tax purposes) of any Worldwide Group
member that is a party to the Covered Transactions or is otherwise relevant
to the TPM.
|
f. The amount, reason for, and financial
analysis of any compensating adjustments under paragraph 4 of Appendix A and
Revenue Procedure 2006-9, section 11.02(3), for the APA Year, including but
not limited to:
-
the amounts paid or received by each affected entity;
-
the character (such as capital, ordinary, income, expense) and country
source of the funds transferred, and the specific affected line item(s) of
any affected U.S. Return; and
-
the date(s) and means by which the payments are or will be made.
|
| g. The amounts, description, reason for,
and financial analysis of any book-tax difference relevant to the TPM for
the APA Year, as reflected on Schedule M-1 or Schedule M-3 of the U.S. Return
for the APA Year.
|
| 2. The Financial Statements, and any necessary
account detail to show compliance with the TPM, with a copy of the independent
certified public accountant’s opinion required by paragraph 5(f) of
this APA.
|
| 3. A financial analysis that reflects
Taxpayer’s TPM calculations for the APA Year. The calculations must
reconcile with and reference the Financial Statements in sufficient account
detail to allow the IRS to determine whether Taxpayer has complied with the
TPM.
|
| 4. An organizational chart for the Worldwide
Group, revised annually to reflect all ownership or structural changes of
entities that are parties to the Covered Transactions or are otherwise relevant
to the TPM.
|
| 5. A copy of the APA. |
