An organization that has significant foreign operations must disclose how its transfer prices are established between domestic and foreign divisions.

Question

Quizplus · Accepted Answer

GAAP (Generally Accepted Accounting Principles) requires organizations with significant foreign operations to disclose how their transfer prices (prices charged for goods or services between different divisions or subsidiaries of the same company) are established between domestic and foreign divisions. This is to ensure transparency and consistency in financial reporting. Failure to disclose this information can lead to penalties and legal consequences.

An Organization That Has Significant Foreign Operations Must Disclose How