The five specific methods used to determine arm's length prices can be divided into two groups: traditional methods and transactional methods of determination. Following are the five methods in detail:

Traditional Methods

• Comparable Uncontrolled Price - The comparable uncontrolled price method uses a contrasting method to analyze the actual cost of goods or services in a controlled activity to the cost charged for goods or services in an uncontrolled activity in a relatable situation.
• Cost Plus - The cost plus approach determines what the actual cost of a good or service is and then what an appropriate additional charge for the good or service would be in a comparable transaction.
• Resale Price - The resale price method uses a similar sales company to complete marketing and selling functions as a way to test the transaction. This offers an expert opinion on the transaction.

Transactional Methods

• Transactional Net Margin Method -- this method completes a juxtaposition of the net profit margin that is achieved in a group of controlled transactions to a group of comparable uncontrolled contracts.
• Profit Split Method - the profit split method is used in a joint venture relationship that includes both parts of the controlled transaction that are relevant to intangible properties.