In Part 1, we have looked at what’s transfer price and some of the rationales for having or to implement such intra transfer pricing.

This article deals with some of the following criteria that a company should have in mind when implementing the intra transfer pricing system:

• the transfer pricing system should able to encourage goal congruence;
• motivate the managers of both the selling and buying centres;
• permit realistic performance appraisal;
• assist the managers of responsibility centres to make the correct decisions and
• last but not least preserve the autonomy of responsibility centre managers.

If you found this post useful, keep updated with future posts by subscribing to FMAccounting (for free) through RSS or email.

Related Entries

• Reasons For Implementing Intra Group Transfer Pricing(Part1)
• Basic Criteria Of An EffectveTransfer Pricing System In A Divisional Organization
• To Centralize Or Decentralize?
• Role Of Management Accounting, Qualification And Abilities Of A Management Accountant
• Main Content Page For Articles On Investment Management