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Chapter 12

Transfer pricing

2.1 Objectives

The transfer price is the price at which goods/services are transferred
between divisions in the same organisation.

A good transfer price should:

1 Result in goal 2 Be fair for each 3 Maintain divisional
congruence division autonomy

4 Aid bookkeeping in the 5 Legally minimise the global
recording of the internal tax liability of the
transfers organisation

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