Several transfer pricing policies are used in practice.These transfer pricing policies include
A)transfer at market price.
B)transfer at negotiated price.
C)transfer at cost.
D)all of these.

Question

Quizplus · Accepted Answer

Transfer at market price ensures that the price of the goods or services transferred between related entities reflects the prevailing market price for comparable goods or services. Transfer at negotiated price allows related entities to freely negotiate the price of goods or services transferred, which may be reasonable if there are unique circumstances that prevent the use of market prices. Transfer at cost is appropriate when the objective is to ensure that a profit is not artificially shifted to another jurisdiction. All of these transfer pricing policies are used in practice and the best choice depends on the specific circumstances of the related entities involved. Therefore, the best choice is D, all of these.

Several Transfer Pricing Policies Are Used in Practice