Intercompany Trade Agreement - Transfer Pricing Rules (tcitr1605m000)

Use this session to specify the price origins, priorities and markup or markdown percentages or amounts for an intercompany trade scenario of an intercompany trade agreement. This determines the amount of the internal invoice.

Note

For intercompany trade scenario Subcontracting Depot Repair, you must define one or more of these time and material subscenarios:

  • Internal Material Delivery
  • Labor
  • Other

Related topics

 

Intercompany Trade Agreement
An attribute that includes the intercompany trade details for an intercompany trade scenario. An intercompany trade agreement is linked to an intercompany trade relationship, together with the intercompany trade scenario.

For the applicable intercompany trade scenario and trade relationship, an intercompany trade agreement:

  • Determines whether internal invoicing is used.
  • Determines whether intercompany trade orders must be approved before they can be processed.
  • Includes the transfer pricing rules that determine the amounts of the intercompany trade transactions.
  • Determines the amounts of the internal invoices, if internal invoicing is specified.
Example

Sales office S1 and warehouse W1 are part of organization A, but are located in different countries. To fulfill a sales order to an external customer, S1 instructs W1 to deliver the goods to the customer. W1 sends an internal invoice to S1 to cover the costs for the goods and the delivery. The amount of the internal invoice is based on the sales order price.

Scenario
A business process, such as External Material Delivery Sales, involving two parts of an organization defined as entities. An intercompany trade scenario is linked to an intercompany trade agreement. The intercompany trade scenario and the intercompany trade agreement are linked to an intercompany trade relationship.
Example

The entities sales office S1 and warehouse W1 are part of organization A, but they are located in different countries. To fulfill a sales order to an external customer, S1 instructs W1 to deliver the goods to the customer. W1 sends an internal invoice to S1 to cover the costs for the goods and the delivery. The amount of the internal invoice is based on the sales order price.

Price Origin
The pricing that must be used for the internal invoice of the selected intercompany trade scenario.

Allowed values

Intercompany Trade Price Origin

Note

The available price origins depend on the selected intercompany trade scenario. For more information, refer to Intercompany Trade Scenario.

Priority
The priority of the price origin for the selected trade scenario. If no pricing information is found for the price origin of the highest priority, LN searches the price origin of the next priority for pricing information.