Transfer pricing between companies
ID:CVTPC
Video Overview
In a large organisation such as a group of companies, often one section or subsidiary buys a product from another section or subsidiary that it has produced. The question that arises is what price should the selling subsidiary charge the buying subsidiary for that product. The price at which the product is sold is called the transfer price. In this tutorial we will focus on how the optimal transfer price between companies is calculated. Should it be at the market price? Or should the buying subsidiary be charged a special price for the product due to the fact that they belong to the same group of companies?
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