ACCA PM考点:Transfer pricing

There is no doubt that transfer pricing is an area that candidates find difficult.It’s not surprising,then,that when it

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There is no doubt that transfer pricing is an area that candidates find difficult.It’s not surprising,then,that when it was examined in June 2014’s Performance Management exam,answers were not always very good.

The purpose of this article is to strip transfer pricing back to the basics and consider,first,why transfer pricing is important;secondly,the general principles that should be applied when setting a transfer price;and thirdly,an approach to tackle exam questions in this area,specifically the question from June 2014’s exam.We will talk about transfer pricing here in terms of two divisions trading with each other.However,don’t forget that these principles apply equally to two companies within the same group trading with each other.

This article assumes that transfer prices will be negotiated between the two parties.It does not look at alternative methods such as dual pricing,for example.This is because,in Performance Management,the primary focus is on working out a sensible transfer price or range of transfer prices,rather than different techniques to setting transfer prices.

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Why transfer pricing is important

It is essential to understand that transfer prices are only important in so far as they encourage divisions to trade in a way that maximises profits for the company as a whole.The fact is that the effects of inter-divisional trading are wiped out on consolidation anyway.Hence,all that really matters is the total value of external sales compared to the total costs of the company.So,while getting transfer prices right is important,the actual transfer price itself doesn’t matter since the selling division’s sales(a credit in the company accounts)will be cancelled out by the buying division’s purchases(a debit in the company accounts)and both figures will disappear altogether.All that will be left will be the profit,which is merely the external selling price less any cost incurred by both divisions in producing the goods,irrespective of which division they were incurred in.

As well as transfer prices needing to be set at a level that maximises company profits,they also need to be set in a way that is compliant with tax laws,allows for performance evaluation of both divisions and staff/managers,and is fair and therefore motivational.A little more detail is given on each of these points below:

If your company is based in more than one country and it has divisions in different countries that are trading with each other,the price that one division charges the other will affect the profit that each of those divisions makes.In turn,given that tax is based on profits,a division will pay more or less tax depending on the transfer prices that have been set.While you don’t need to worry about the detail of this for the Performance Management exam,it’s such an important point that it’s simply impossible not to mention it when discussing why transfer pricing is important.

From bullet point 1,you can see that the transfer price set affects the profit that a division makes.In turn,the profit that a division makes is often a key figure used when assessing the performance of a division.This will certainly be the case if return on investment(ROI)or residual income(RI)is used to measure performance.Consequently,a division may,for example,be told by head office that it has to buy components from another division,even though that division charges a higher price than an external company.This will lead to lower profits and make the buying division’s performance look poorer than it would otherwise be.The selling division,on the other hand,will appear to be performing better.This may lead to poor decisions being made by the company.

If this is the case,the manager and staff of that division are going to become unhappy.Often,their pay will be linked to the performance of the division.If divisional performance is poor because of something that the manager and staff cannot control,and they are consequently paid a smaller bonus for example,they are going to become frustrated and lack the motivation required to do the job well.This will then have a knock-on effect to the real performance of the division.As well as being seen not to do well because of the impact of high transfer prices on ROI and RI,the division really will perform less well.

The impact of transfer prices could be considered further but these points are sufficient for the level of understanding needed for the Performance Management exam.Let us now go on to consider the general principles that you should understand about transfer pricing.Again,more detail could be given here and these are,to some extent,oversimplified.However,this level of detail is sufficient for the Performance Management exam.

翻译参考

毫无疑问,转让定价是候选人感到困难的一个领域。因此,毫不奇怪,当它在2014年6月的绩效管理考试中进行检查时,答案并不总是很好。

本文的目的是将转让定价带回基础,首先考虑为什么转让定价很重要;第二,在设定转让价格时应采用的一般原则;第三,解决该领域考试问题的方法,特别是2014年6月考试的问题。我们将在这里讨论两个部门相互交易的转让定价。但是,不要忘记这些原则同样适用于同一集团内的两家公司相互交易。

本文假设转让价格将由双方协商。例如,它不考虑替代方法,例如双重定价。这是因为,在绩效管理中,主要关注的是制定合理的转让价格或转让价格范围,而不是制定转让价格的不同技术。

转移定价的重要性

必须了解转让价格仅在它们鼓励部门以最大化公司整体利润的方式进行交易时才重要。事实是,跨部门交易的影响无论如何都会在整合中消失。因此,真正重要的是外部销售的总价值与公司总成本之比。因此,虽然获得正确的转让价格很重要,但实际转让价格本身并不重要,因为销售部门的销售额(公司帐户中的贷项)将被采购部门的采购(公司帐户中的借方)抵消,并且这两个数字将完全消失。剩下的将是利润,这仅仅是外部销售价格减去两者产生的任何成本生产货物的部门,无论它们发生在哪个部门。点击免费下载>>>更多ACCA学习相关资料

除了需要将转让价格设定在使公司利润最大化的水平外,还需要以符合税法的方式设定,允许对部门和员工/经理的绩效进行评估,并且是公平的,因此励志。下面对这些要点中的每一个都给出了更多详细信息:

如果您的公司位于多个国家/地区,并且在不同国家/地区设有分部并相互进行交易,则一个分部向另一个分部收取的价格将影响每个分部的利润。反过来,鉴于税收是基于利润的,一个部门将根据已设定的转让价格缴纳或多或少的税。虽然您不需要担心绩效管理考试的细节,但它是如此重要,以至于在讨论为什么转移定价很重要时,根本不可能不提及它。

从要点1中,您可以看到转移价格集会影响部门的利润。反过来,部门的利润通常是评估部门绩效时使用的关键数字。如果使用投资回报率(ROI)或剩余收益(RI)来衡量绩效,情况肯定会如此。因此,例如,一个部门可能会被总部告知它必须从另一个部门购买组件,即使该部门收取的价格高于外部公司。这将导致利润降低,并使采购部门的业绩看起来比其他情况更差。另一方面,销售部门的表现似乎更好。这可能会导致公司做出错误的决定。

如果是这种情况,该部门的经理和员工会变得不高兴。通常,他们的薪酬将与部门的绩效挂钩。如果由于经理和员工无法控制的事情导致部门绩效不佳,例如他们因此获得较少的奖金,他们将变得沮丧并缺乏做好工作所需的动力。这将对部门的实际表现产生连锁反应。除了由于高转移价格对投资回报率和投资回报率的影响而被视为表现不佳之外,该部门的表现确实会不太好。

可以进一步考虑转移价格的影响,但这些点足以满足绩效管理考试所需的理解水平。现在让我们继续考虑您应该了解的有关转让定价的一般原则。同样,这里可以提供更多细节,而这些在某种程度上过于简单化了。但是,这种详细程度对于绩效管理考试来说已经足够了。

相关阅读:【ACCA PM考点:Building blocks of performance management

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