講義匯總afmruth單部分pricing

GeneralconsiderationsIndecidingontheirtransfrpricingpolicies,multinationalstakeintoaccountmanyfactors: Goalcongruence:encouagelocaldecision-makingthatwillimprovetheprofitfor asa Performanceevluation:preventingonunfairimpacton Financing:transferpricingmaybeusedtoboosttheprofitsofasubsidiary,tomakeiteasierforittoobtainfundsinthehost Taxation:channellingprofitsoutofhightaxratecountriesintolowerones.Regulation-Arm'slengthstandardTransferpricemanipulation,existswhentransferpricesareusedtoevadeoravoidpaymentoftaxesandtariffs.Arm'slengthstandard:thismeansthatintra-firmtradeofmultinationalsshouldbepricedasiftheytook cebetweenunrelatedpartiesactingatarm'slengthincompetitivemarkets.Themainmethodofestablishing'arm'slength'transferpriceisthecomparableuncontrolledprice(CUP)methodwhichlooksforacomparableproducttothetransactioninquestion,eitherintermsofasimilarproductbeingboughtorsoldbythemultinationalinacomparabletransactionwithanunrelatedpartyorasimilarproductbeingtradedbetweentwounrelatedparties.Marketbasedtransferpricing,and(ifthereisaclearmarketpriceitwillalsoreducethelosesasaresultofaninternaltransfershowsthetruecost(revenueforegone)tothedivisionofaninternaltransfer.However,ifadivisionwouldhavetoincurmarketingcoststosellaninternaltransferwouldnotincurthiscost,sothetransferpriceeslower(iemarketpricelessmarketingcostssaved).Threeconditionsforminimumtransferpricecanachievefullcapacityandnoalternativei.e.Perfectcompetitivemarket.Marketisabletoabsorbtheentireoutputofsupplyingdivision.Minimumtransferprice=marketprice-avoidablecost(ifBelowcapacityandnoalternativeuseof cannotsellallitsproductsinMinimumtransferprice=variablecost-avoidablecost(ifHavealternativeMinimumtransfer=variablecost+alternativecontribution-avoidablecost(ifAdvancedTransferPricingMethod Thetransferpriceismarginalcost,butinadditionafixedsumispaidperannumorperperiodtothesupplyingdivisiontogoatleastpartofthewaytowardscoveringitsfixedcostsandpossiblyeventtogenerateaDysfunctionaldecisionmayarisewhencompetitivemarketexit,thetransferpricemaybeunderpriced DualOnepriceforsupplyingdivisionandanother(usuallylower)priceforbuyingdivision.Internal-profitwillberemovedwhenFSconsolidated.Itisamotivationalapproach,bothdivisionswouldappear2018M/JMatchingandnetting,MoneymarkethedgeTransferpricing部分節(jié)選2018M/JQ4 Evaluatetheextenttowhichchangingtoamarket-pricesystemoftransferpricingwillresolvetheconcernsoftheAdveraneGroup (6marks)2018M/JQ4TheAdveraneGroupboardhasbeenreviewingthevaluationofinter-grouptransactions,asitisconcernedthatthecurrentsystemisnotworkingwell.Currentlyinter-grouptransferpricesaremostlybasedonfixedcostplusamark-upnegotiatedbythebuyingandsellingdivisions.Iftheycannotagreeaprice,eitherthesaledoesnottakeceorthecentraltreasurydepartmentdeterminestheTheboardhasthefollowing2018M/JQ4Bothsellingandbuyingdivisionshaveclaimedthatpricesareunfairanddistortthemeasurementoftheirperformance.Significanttreasurydepartmenttimeisbeingtakenupdealingwithdisputesandthendealingwithcom intsthatthepriceithasimposedisunfairononeortheotherdivision.Somepartsofthegrouparechoosingtobuyfrom ratherthan rswithintheAsaresultofthereview,theAdveraneGroupboardhasdecidedthattransferpricesshouldinfuturebebasedonmarketprices,whereanexternalmarketexists.2018M/JQ4Solution(c)Transferpricing(c)Changingtomarket-pricebasedtransfer在存在外部市場(chǎng)的情況下，基于市場(chǎng)價(jià)格的transferpricingsystem的方案，能夠更加公允地衡量各個(gè)divisions的績(jī)效，但是要注意調(diào)整avoidablemarketingcost.注意case的目的是保證內(nèi)部采購(gòu)，當(dāng)buyingdivision有外購(gòu)自主權(quán)時(shí)，考慮以 Sellingdivision有閑置產(chǎn)能時(shí)，使用variablecostpricing 實(shí)務(wù)中，仍需要Headoffice 從利潤(rùn)加成price提價(jià)為marketprice，buyingdivision2018M/JQ4Solution(c)transferpricingSettingthetransferpriceatmarketpriceshouldenableafairassessmentoftheperformanceofboththebuyingandsellingdivisions.Bothinternalandexternalsaleswillbeaccountedforatthesameprice.However,thismaydistortperformanceinthatthecostsofinternalsalesmaybelowerthanexternalsales.Forexample,administrationcostsshouldbelowerandthereshouldbenocostsofbaddebts.ThesecostsavingsshouldbesharedbetweenthetwodivisionstogiveafairIfthesellingdivisionhassparecapacity,sellingatincrementalcostratherthanmarketpricemayprovidegreatercertaintythatthebuyingdivisionwillusethesellingdivision.2018M/JQ4Solution(c)transferpricingBusinessIntheory,usingmarketpriceshouldmeanthatthecentraltreasuryfunctionhastointerveneless.SimplemarketBusinessHowever,inreality,theremaybecomplicationsthatrequirecentralintervention.Themarketpricemaybedifficulttodetermineormayfluctuatewildly,andcentraltreasurymayhavetodecidewhichpricetouse.Ifitisdecidedthatanallowanceshouldbemadeforcostsofinternaltransferbeinglower,centraltreasurymayhavetodeterminewhatthisshouldbeasitmayvarysignificantlybetweenproductsand2018M/JQ4Solution(c)transferpricingSpecifyingthetransactiontakesceatmarketpriceisdesignedtoensurethatthebuyingdivisionbuysfromthesellingdivision,ratherthananexternal rifthebuyingandsellingdivisionhavefailedtoagreeaprice.Theimplicitassumptionisthatthebuyingdivisionwillusethesellingdivis