Dual-rate transfer pricing is a method where transfer prices are set at different levels for the supplying and receiving divisions within an organization, aimed at incentivizing internal transactions without penalizing either division.
Market-based transfer prices align internal transactional prices with prevailing market prices to mitigate bias and ensure fairness within an organization’s various divisions.
A computer file used to record both external and internal transactions, crucial for maintaining accurate and up-to-date financial records. Transaction files are frequently compared to standing data files in accounting systems.
Transfer price refers to the price charged by individual entities of a multi-entity corporation on transactions among themselves. It is also termed transfer cost and is predominantly used where each entity is managed as a profit center and must deal with other internal parts of the corporation on an arm's length basis.
Transfer prices refer to the costs at which goods and services are exchanged between divisions or subsidiaries within a conglomerate. They significantly influence the profitability of each division and can serve multiple strategic purposes including motivating managers, evaluating performance, maintaining autonomy, and moving profits.
