Domestic Transfer Pricing

• Using the market price can help Xerox

better respond to a competitive pricing
threat.
• Less arbitrating of transfer price disputes
by corporate controller.
 Multinational Transfer Pricing
• Current method may not conform to
foreign laws and carries a greater taxation
risk than solutions tailored to each country.
• Use outside consultants
 Transaction Exposure
• Transaction currency exposure is best
handled through centralized coordination
of the corporate’s overall hedging needs.
 Translation Exposure
• Compare budgets and actual results using
the same metric
• Initial-initial, projected-projected, or
ending-ending
 Economic Exposure
• Real exchange rate changes require
important strategic and operating
decisions.
Performance Evaluation of Foreign
Subsidiaries
• Evaluating its business units according to
their legal entities makes local subsidiary
managers see more of a direct link
between their decisions and actions,
including related evaluative feedback.