Easy Office

Segment reporting

This query is : Resolved 
Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
23 November 2015 A company has an inter-segment transfer pricing policy of charging at cost less 10%. The market price are generally 25% above cost. Is the policy adopted by the company correct?
Profile Image

CA R SEETHARAMAN

Profile Image

CA R SEETHARAMAN (Expert)
23 November 2015 It should be cost plus 10%. Yes the policy adopted by the company is correct if it is cost plus 10%.
Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
23 November 2015 No my question is exactly the same,it is cost less 10% to to inter segments and cost plus 25% to market.



Profile Image

CA R SEETHARAMAN

Profile Image

CA R SEETHARAMAN (Expert)
23 November 2015 Then your policy is not correct. Each segment should generate some profit. It can't be cost less.
Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
25 November 2015 what is the base of your answer,can you please explain, where it is mentioned.
Profile Image

CA R SEETHARAMAN

Profile Image

CA R SEETHARAMAN (Expert)
25 November 2015 It is practice followed in our company as well as by other companies. No company will charge inter segment pricing at cost less 10%.
Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
26 November 2015 Okay sir, is there any penalty or fine if company is doing so?
Profile Image

CA R SEETHARAMAN

Profile Image

CA R SEETHARAMAN (Expert)
26 November 2015 No penalty or fine it is the internal policy of the company it can do so.



Avatar

Querist : Anonymous

Profile Image
Querist : Anonymous (Querist)
26 November 2015 Okay sir. Thank you for your valuable advice.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

CAclubindia's WhatsApp Groups Link


Similar Resolved Queries


loading


Unanswered Queries


Easy Office

Trending Online Classes

view all classess
CCI Pro


Answer Query



Quick Links