For purposes of this section, the controlled participants may not rely solely upon financial accounting to establish satisfaction of the accounting requirements of this paragraph (k)(3). Rather, the method of accounting must clearly reflect income. Thor Power Tools Co. v. Commissioner, 439 U.S. 522 (1979) ... Read more

The controlled participants must maintain books and records (and related or underlying data and information) that are sufficient to – (A) Establish that the controlled participants have used (and are using) a consistent method of accounting to measure costs and benefits; (B) Permit verification that the amount of any contingent PCT Payments due have been (and are being) properly determined; (C) Translate foreign currencies on a consistent basis; and (D) To the extent that the method of accounting used materially differs from U.S. generally accepted accounting principles, explain any such material differences ... Read more

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