Commonly used internal fund transfer pricing methods in practice include

In practice, the commonly used internal fund transfer pricing methods include the following three:

On the basis of comprehensive consideration of various favorable factors, the parent company should set the transfer price according to the requirements of the four principles of "consistent goal, incentive, autonomy and fairness". In practice, group enterprises generally adopt the following transfer prices:

1. Set the transfer price according to the cost. When there is no same product outside the group enterprise, or the adoption of market price is likely to cause major conflicts of interest in the operation of each subsidiary, or the product manufacturing process contains the proprietary technology of the group enterprise, the transfer price is generally set on the basis of cost.

2. Set the transfer price according to the market price. If the market of intermediate products or services of group enterprises is competitive, and the interdependence between subsidiaries is not significant, the transfer price is generally based on the market price of products or services.

3. Double pricing. Because both cost method and market method have their own shortcomings, when the parent company thinks that there is no optimal single transfer price, it should consider adopting dual pricing method, that is, setting different transfer prices according to different subsidiaries.

Three principles and basic meanings of internal transfer pricing

First, the formulation of internal transfer price should be conducive to distinguishing the achievements and shortcomings of each responsibility center;

Second, the formulation of internal transfer price should be fair and reasonable, avoiding subjectivity and arbitrariness;

Third, the internal transfer price should be voluntarily accepted by both the supply and demand sides. The types of internal transfer prices mainly include: actual cost method, actual cost additive process, standard cost method, standard cost additive process, market price method, dual market price method, agreement price method, etc.

Transfer price is widely used in enterprise decision-making, cost calculation, performance evaluation and so on. It is related to the company's business strategy, internal control and management system. It is generally composed of purchase price, circulation cost and profit. Its characteristic is that it only reflects the economic relationship between profit centers in enterprise groups or companies, and generally does not directly contact consumers. It is not used as the basis and calculation basis for various differences and price comparisons.