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“Arms length transaction” means:
An arms length transaction involves two independent parties and each is attempting to get the best deal possible.. In an arms length transaction, the seller of an Asset attempts to get as much as possible for the Asset from an independent person who is striving to get the it for the lowest possible price. Both parties probably know the retail value and the wholesale value of the Asset and both want the best price:
The seller is attempting to sell the Asset at a price that is close to the retail value
The buyer is attempting to buy the Asset for the wholesale value or less.
Consequence : The purchase price/selling price cannot reflect the real value/market value--may tend to revaluation.
Arm's Length Transaction
A transaction in which the buyers and sellers of a product act independently and have no relationship to each other.
The concept of an arm's length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party
