24-14 nany These and further developments tend to bring prices and company profits more and more in line on the European market. Of course, it must still be ascertained for each individual case whether the market conditions that apply to non- German com- panies are comparable. At least, in many industries foreign companies are subject to the same business cycle as companies in germany. (c) Profit Split Method The administrative principles allow an allocation of income between the par to the transaction through a profit split in special cases wherein it is not possible to compare a transaction with similar arm's length situations. These situations occur in particular where the transactions in question would not have occurred between unrelated parties. The practical relevance in Germany is rather low, but in some sit uations the availability of a profit split method might become very important. In practice, it is often difficult to determine an arm's length price if the profit of a group is derived from intangibles used by both parties. Since it is very difficult to calculate the value of the intangible or the impact on the price, the problem can bet- ter be addressed by the use of the residual profit method. .The profit split meth ods themselves are not further explained by the German tax administration, but guidance can be taken from the OECD Guidelines( Chapter I B i) The increase in economic cross-border integration of businesses and the in- crease in interrelated transactions is expected to make the profit split more impor tant in future. However, the taxpayer should be very careful in applying the profit split method. Officially, the profit split is still not commonly applied in Germany and its acceptability depends to a great deal on the result of the method and the eco- nomic understanding of the tax auditors. Acceptability of the profit split method is low, even in the banking industry. There, the profit split method is probably the global trading environment. 46S some only feasible approach to address some transfer pricing issues, for example, in the (d) Choice of Methods According to the administrative principles, arms length prices can be arrived at by using any of the three traditional methods recognized by the OECd Guidelines the CUP method, the resale price method, and the cost plus method As such, there is no order of priority in choosing an adequate transfer pricing method. In select ing an appropriate method, the administrative principles require that a prudent business manager be guided by the method coming closest to the conditions under which arms length prices are established in economically comparable markets. 47 principles§24.6 4See OECD Guidelines $53.19-3.22 4See, for example, German Institute of Chartered Accountants, April 9, 1996, WPg 1996, p. 369 See administrative principles 5 24.1