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Transfer Pricing
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Services and products are exchanged within organisations between the various centres
or departments. These services or products have a monetary value, the value of which
needs to be attributed to the respective cost centres and departments. The price
at which these goods and services are transferred can be determined and charged
using structured OLAP models. The transfer volumes and prices may use various factors
in determining the transfer prices being used between the different centres or departments.
This structured approach is also becoming more fundamental in justifying inter company/departmental
charges across country borders to the respective revenue/tax authorities. Other
issues such as profit incentives also make this area very sensitive. |
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