The GAAP financial reporting rules for segments require that all companies use transfer prices based on market prices.

Question

Quizplus · Accepted Answer

While GAAP requires companies to use transfer prices based on market prices for segment reporting, it does not specify any transfer pricing method for any industry, including the oil and gas industry. The method used is left to the discretion of the company, as long as it is consistent with the market price principle.

The GAAP Financial Reporting Rules for Segments Require That All