Question

What is "transfer pricing?" The prices established to record an intercompany sale The taxes paid on sales in a foreign country The value of sales made in a foreign country The cost to convert from one country's GAAP to another country's GAAP

Answer 1

The prices established to record an intercompany sale

Step-by-step explanation:

Transfer pricing refers to the established price used to record sales of goods or services between a parent and a subsidiary, or between subsidiaries. E.g. Ford sells pickups to its Mexican subsidiary, the price used to record the transaction is referred to as transfer pricing.

US GAAP doesn't allow profits to be made with intercompany sales, so transfer pricing should include only the cost of goods sold plus any other cost related to the transaction.

Answer 2

Transfer pricing are the prices established to record inter-company sale

Step-by-step explanation:

The transfer price is the price at which one arm of a business sells to the other.For instance,the price at which one division of a company sells to another division,

The transfer price is very important in order that tax authority may see that the sale price charged is at arms length for all parties involved.