Do we have any transfer pricing guru's out there (not using transfer orders in NS). Between 2 global subs that buy and sell stock, where a 5% TP needs to be applied each time a SO/PO I/C trans is created. How is it best to implement the additional 5% and make sure the correct financial treatment is applied. Thanks Chris

If you are already creating Intercompany SO, POs, etc. cant you just create a Markup item for the 5% and pass it onto the receiving sub?

You can also use a WF and the. Create line action to add your Markup item automatically at 5% rate to the SO when it’s created

@MGBC - Even better idea! I briefly looked at a WF Transaction record and did not see a Sub-Type for an Intercompany Sales Order. Would you recommend the trigger being the Customer(s) selected for it to add the 5% Markup? **Customer = Other Subsidiaries setup as Customers

But is that the correct accounting treatment? When the receiving subsidiary sells it to third party, the COGS will be calculated based on the inventory cost (exclusive of intercompany markup). Yes, that should be eliminated at consolidated level. But when you run the receiving subsidiary financial statements, don't you need to include the markup as part of the inventory asset/COGS (unless the net realizable value is lower than the inventory cost + markup)? I was told that this markup approach does not conform to the accounting standards but I would like to hear other people's thoughts.

Yes I think the Intercompany SO is just a standard SO it isn’t a separate sub type. Just use the condition of customer = [list your Intercompany customers]