The Role Of Internal Assignment Prices In The Evaluation Of The Transactions Between Profit Centers
AbstractThe internal assignment price, also called transfer price, represents the value at which the trans-fers between profit centers within the same economic entity are assessed. These transfers are determined by the organizational and functional structure of the economic entity. The internal the in-ternal exchanges between the responsibility (profit) centers of the entity must be evaluated at the assignment price. Moreover, the performances of these centers are influenced by the existence of in-ternal assignments, and the explanation lies in the fact that what the “buying” center considers a cost will become an income for the “selling” center. Despite all these, the internal assignment price does not influence the general income of the economic entity, but only the analytical income of each re-sponsibility center.`The problem of the internal assignment price was scientifically approached in 1920 by General Motors, followed by other companies in the USA (1930s, 1940s) and then by France, starting with 1950.
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Bibliographic InfoArticle provided by Alexandru Ioan Cuza University, Faculty of Economics and Business Administration in its journal Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi.
Volume (Year): 2010SE (2010)
Issue (Month): (july)
Contact details of provider:
Postal: Universitatea Al. I. Cuza; B-dul Carol I nr. 22; Iasi
Phone: 004 0232 201070
Fax: 004 0232 217000
Web page: http://anale.feaa.uaic.ro/anale/
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price; transfers; performances; income.;
Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
- P44 - Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
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