Question

Transfer pricing is defined as ________. the means by which subsidiaries and affiliates charge each other as they exchange goods and services compensation paid to owners of intellectual property the process through which a parent deposits a large sum in a foreign bank, which transfers it to a subsidiary as a loan methods for transferring funds exclusively from foreign subsidiaries to parent corporations

Answer 1

Transfer price is a price charged for a good or service by one part of a company(segment) to another part of a company(segment).

When charging transfer pricing no profits are made because they are moving it within the same company. The smaller companies(segments) within a larger one are working together to develop their end good or service.