Transfer pricing allocations overview

Use Transfer Pricing Allocations to automatically calculate intercompany recharges or price transfers.

You can create intercompany billing invoices for these recharges. For example, it can be used to charge out royalties from a Producer (IP Owner) to a Consumer (Distributor). It can also be used to distribute central costs of shared services facilities.

Transfer pricing is the price that is applied to intercompany transactions. These transactions can include the sale of products, the provision of a service, the lending of money, and the use of intangible assets.

Transfer pricing allocations is used to read balances from the Global Ledger. Recharge amounts are calculated based on your rules. Calculated amounts are interfaced to Intercompany Billing to create intercompany billing invoices.