Question

What is the purpose of a transfer price? Explain.

What is the purpose of a transfer price? Explain.

Homework Answers

Answer #1

Transfer price is the price that is charged by one division of the company from other division for goods or services provided. Goods and services may also be provided to Holding, Subsidiary or a division of the company and the price charged is based on the market prices. To reduce tax burden company use inter company transfer pricing, they charge low from from the divisions which are in low tax countries and high from the divisions which are in high tax countries.

Major purpose of transfer pricing is to allocate profits between the parent with subsidiary or by a division to other divison and other objective is to reduce tax and increase profits.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is the purpose of an arrest? Clearly explain the purpose for a) police b) criminal...
What is the purpose of an arrest? Clearly explain the purpose for a) police b) criminal justice system c) society
Discuss/Explain what an indicator is and its purpose.
Discuss/Explain what an indicator is and its purpose.
Explain what the purpose of an institutional review board (IRB) is.
Explain what the purpose of an institutional review board (IRB) is.
Explain what is meant by the immediate family and outline the tax implication on the transfer...
Explain what is meant by the immediate family and outline the tax implication on the transfer of Property
Independent transfer activities between wheelchair to floor and return 1. Which transfer activities are considered dependent,...
Independent transfer activities between wheelchair to floor and return 1. Which transfer activities are considered dependent, assisted, and independent? 2. What is purpose of preparing the environment before initiating transfer activities? 3. What are the teaching tips used when teaching transfer activities?
Explain what the purpose of the veil of ignorance is. Be precise, thorough, and use your...
Explain what the purpose of the veil of ignorance is. Be precise, thorough, and use your own words.
What is the purpose of Disability Insurance? Explain the difference between the waiting period and the...
What is the purpose of Disability Insurance? Explain the difference between the waiting period and the benefit period.
Explain the basics of forecasting. What is the typical purpose for forecasting? How is a forecasting...
Explain the basics of forecasting. What is the typical purpose for forecasting? How is a forecasting model typically developed?  
What is the purpose of the bypass and coupling capacitors applied in the voltage amplifiers? Explain...
What is the purpose of the bypass and coupling capacitors applied in the voltage amplifiers? Explain in detail with proper mathematical derivation.
Describe what an amortization schedule is and its uses. Explain the purpose of an amortization schedule.
Describe what an amortization schedule is and its uses. Explain the purpose of an amortization schedule.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT