Transfer Price

Transfer Price is the price at which an item is transferred from one operating unit to another operating unit. Transfer price is also usually called as “Arm’s length Price” and is generally guided by the originating country’s accounting standards.
Logic for transfer price determination for shipping flows is explained in Figure . However, for procuring flow, you can specify whether the transfer price is same as the PO price in intercompany transaction flow. This means that an operating unit sells at the same price at which it procured the item to another operating unit. If you specify that the transfer price is not same as the PO price in the intercompany transaction flow, then system uses the same logic as depicted in . For procuring flow, you specify the pricing option (transfer price or PO price) separately for asset and expense items.

You can make use of the external API feature of the intercompany invoicing to develop your own custom logic for determining transfer price. For example, if you want to use the cost price as the transfer price, then build your custom logic to fetch the cost price. The name of the external API is MTL_INTERCOMPANY_INVOICES.get_transfer_price and the name of the file is INVICIVB.pls located at $INV_TOP/patch/115/sql. Ensure that the API returns transfer price along with currency code.
Please ensure that the transfer price is not 0. Oracle expects that the transfer price should be greater than 0. You will be able to create an intercompany AR invoice but will not be able to create an intercompany AP invoice resulting in intercompany reconciliation discrepancy. You need to set the profile “QP: Security Control” to ‘Off’, to generate logical transactions and for raising the intercompany AR invoice.