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Transfer pricing
Syllabus C
Transfer pricing 7 / 8
Indicative syllabus content:
• The theory of transfer pricing, including perfect, imperfect and no market for the intermediate good.
• Negotiated, market, cost-plus and variable cost-based transfer prices. Dual transfer prices and lump sum payments as means of addressing some of the issues that arise.
• The motivation of divisional management.
• Divisional and group profitability.
• The autonomy of individual divisions.