| Intercompany Trade Agreement - Transfer Pricing Rules (tcitr1605m000)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
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. 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. | |