Transfer pricing methods, Managerial Accounting

Transfer Pricing Methods

Transfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on organizations gauged. Emmanuel and Otley bring together a number of views of transfer pricing methods in practice. Essentially, they report that there are three categories of transfer price: cost based, market based and negotiated. Within the surveys reported, in terms of very rough approximations, about 20% of companies used negotiated prices; about 30% of companies used market values and about half used cost based prices. For each category, a good degree of discretion existed to develop alternative bases at a detailed level. For market based prices, for instance, competitors' prices, list prices, most recent bid and values adjusted by a discount provided alternative bases. The description which follows does not go to such a level of detail but concentrates on four main approaches: absorption cost bases, variable cost bases, market value bases and negotiated value bases. A final section describes the use of linear programming.

Posted Date: 12/8/2012 5:14:54 AM | Location : United States

Related Discussions:- Transfer pricing methods, Assignment Help, Ask Question on Transfer pricing methods, Get Answer, Expert's Help, Transfer pricing methods Discussions

Write discussion on Transfer pricing methods
Your posts are moderated
Related Questions
Given the persistent problem with starvation in some parts of the world, and the anticipated population growth in developing nations, do we need genetically modified foods? Is it r

a)    Does Ford report any investments carried as trading securities, available-for-sale securities, or held-to-maturity securities? If so, go over their significance to both the b

TEMPORARY CLOSURE OF FACTORY OR DEPARTMENT Here there is a similar situation to that of discontinuance of a product such as Model N40. A factory which is expected to earn some

What does it mean when we say consistency is the central feature of economic rationality?

X ltd. has a current ratio of 4.5:1 and acid test ratio of 3:1. If its inventory is Rs. 24000, find out its current liabilities.

Each company must establish its own credit policy based on the ground condition and the environment wherein it is operating. The major goal of the credit policy is to stimulate sal

CONTIGENCY THEORY Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is ter

I am part of a marketing group, and we are working on a project for a local cable company,they currently serve 3,200 customers and sell 50 wireless boxes a month,what I need to do

reasons for favourable or adverse variances i.e. prise usage, mix, yeild

different methods used to assign manufacturing overhead