Transfer pricing

Syllabus C

Transfer pricing ^{7 / 8}

Indicative syllabus content:
• The theory of transfer pricing, including perfect, imperfect and no market for the intermediate good.
• Negotiated, market, cost-plus and variable cost-based transfer prices. Dual transfer prices and lump sum payments as means of addressing some of the issues that arise.
• The motivation of divisional management.
• Divisional and group profitability.
• The autonomy of individual divisions.