The document discusses how to calculate a transportation allowance under a non-arm's length pipeline transportation arrangement according to CFR § 206.111. It provides an example scenario where Company A sells oil to Company B at a posted price minus a transportation factor. The transportation factor is calculated based on actual costs like operating expenses, overhead, depreciation, and rate of return for the pipeline. The reported price in the contract is adjusted based on this transportation factor deduction, but the corrected reported price per regulations adds back the quality bonus.