As a result , the value of the transferred good is revenue to the selling division and cost to the buying division.
This value, or internal price, is called the transfer price, in other words, a transfer price is the charged for a component by the selling division to the buying division of the same company, transfer pricing is a complex Issue, The impact of transfer prices on divisions and the company as a whole, as well as methods of setting transfer prices, will be explored in the following sections.