Flexible Management of Transfer Prices and Multiple Valuation Approach Based upon SAP ERP within the Context of International Controlling

Thèse de Master , 2014 , 76 Pages , Note: 1,7

Gestion d'entreprise - Controlle de gestion

According to the estimations of the World Trade Organization, sixty percent of the whole world trade is being concluded within the multinational enterprises. This can be put down to the fact that globalization has had led the enterprises separate business processes into divisions and the concept of “profit center” has gained currency in this regard. As a result of “vertical integration” between these profit centers, there is an enormous volume of exchanged goods within multinationals. This development in the practice gave rise to debates on an already existing issue, “Transfer Pricing”, however, from another dimension. The inter-company transfer of goods has gone beyond the domestic boundaries, and become an important issue in the international context. International Transfer Pricing can be assumed as an opportunity as well as a confounding factor from the perspective of multinational enterprises. On the one side, it is possible to move profits between individual divisions and create tax advantages depending on the corporate tax rates in different tax jurisdictions. On the other side, it becomes more complex for companies to track down the effects of intra-company transfers, evaluate the efficiency of the divisions and the company as a whole and make optimal decisions accordingly. At this point, some academicians propose using a multiple set of books to determine Transfer Prices. In so doing, they argue that managerial requirements can be met and optimal decisions can be reached for the good of the group as a whole.

In the light of this information, a software product named SAP® ERP® comes to attention with its unique feature in terms of determining Transfer Prices flexibly. The multiple valuation approach in this system enables the user set Transfer Prices in different valuation techniques, i.e. legal view, group view and profit center view. This study investigates the relationship between these two research objects; thus, aims to verify whether and up to which extent implementing such a system is functional and beneficial by composing Transfer Pricing and managerial requirements that come along with it.

Inhaltsverzeichnis (Table of Contents)

• INTRODUCTION
  • MOTIVATION AND PROBLEM DESIGN
  • LIMITATIONS OF THE STUDY
  • RESEARCH METHODOLOGY AND STRUCTURE
• THEORETICAL FRAMEWORK AND ESSENTIALS
  • THE TERM CONTROLLING AND ITS CONCEPTIONS
  • CONTROLLING TASKS AND INSTRUMENTS
  • CONTROLLING IN INTERNATIONAL CONTEXT
    • COMPARATIVE APPROACH - MANAGEMENT ACCOUNTING VS. CONTROLLING
    • SPECIFIC FEATURES OF CONTROLLING IN MULTINATIONAL ENTERPRISES
  • BASICS OF TRANSFER PRICING AND RELATED TERMS
• TRANSFER PRICES IN THE MANAGEMENT PRACTICE
  • THE RELATION BETWEEN TRANSFER PRICES AND DIVISIONAL STRUCTURE
  • FUNCTIONS AND PURPOSES OF TRANSFER PRICES
  • ALTERNATIVE METHODS OF TRANSFER PRICING
    • SETTING TRANSFER PRICES FROM THE BUSINESS ADMINISTRATION PERSPECTIVE
      • MARKET-BASED TRANSFER PRICES
      • COST-BASED TRANSFER PRICES
        • MARGINAL COST TRANSFER PRICES
        • FULL COST TRANSFER PRICES
        • DUAL PRICING
      • NEGOTIATED TRANSFER PRICES
    • SETTING TRANSFER PRICES FROM THE TAX-REGULATING PERSPECTIVE
• FLEXIBLE MANAGEMENT OF TRANSFER PRICES BASED UPON SAP ERP AND MULTIPLE VALUATION APPROACH
  • THE EFFICACY OF SAP ERP IN TRANSFER PRICING
  • THE SAP ERP SYSTEM
    • BASIC FACTS ABOUT SAP AND THE STANDARD SOFTWARE ERP
    • THE STRUCTURE OF SAP ERP AND RELEVANT MODULES
    • CONTROLLING IN SAP ERP
      • CONTROLLING ENTERPRISE STRUCTURE
      • CUSTOMIZING CONTROLLING ORGANIZATION
  • DESIGNING TRANSFER PRICES AND MULTIPLE VALUATION APPROACH IN SAP ERP
    • CONFIGURING MULTIPLE VALUATIONS
    • CONFIGURING PROFIT CENTER ACCOUNTING
  • ECONOMIC VIABILITY OF SAP ERP IMPLEMENTATION

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This study investigates the relationship between flexible management of transfer prices and the multiple valuation approach in SAP ERP. It aims to determine whether and to what extent implementing such a system is functional and beneficial by considering both transfer pricing and managerial requirements.

• The impact of globalization on multinational enterprises and the rise of transfer pricing as a key issue in the international context.
• The use of multiple valuation approaches for transfer pricing and their potential benefits and challenges.
• The role of SAP ERP in facilitating flexible transfer price management and its integration with different valuation techniques.
• The economic viability and feasibility of implementing SAP ERP for transfer pricing purposes.
• The potential benefits and challenges of implementing SAP ERP for transfer pricing within multinational enterprises.

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter introduces the study's motivation and problem design, outlining the research question and its significance. It also discusses the limitations of the study and the adopted research methodology and structure.
• Theoretical Framework and Essentials: This chapter provides a comprehensive overview of the theoretical framework underpinning the study, including the concepts of controlling, controlling tasks and instruments, and controlling in an international context. It also explores the basics of transfer pricing and related terms.
• Transfer Prices in the Management Practice: This chapter delves into the practical application of transfer prices, examining their relationship with divisional structures and their functions and purposes within multinational enterprises. It also explores various alternative methods of transfer pricing, including market-based, cost-based, and negotiated approaches.
• Flexible Management of Transfer Prices Based Upon SAP ERP and Multiple Valuation Approach: This chapter focuses on the application of SAP ERP in managing transfer prices flexibly. It explores the efficacy of SAP ERP in transfer pricing and delves into the system's structure, relevant modules, and controlling functionalities. It also examines the design and configuration of transfer prices and multiple valuation approaches within SAP ERP, including the configuration of multiple valuations and profit center accounting.

Schlüsselwörter (Keywords)

This study focuses on key concepts such as transfer pricing, multiple valuation approach, SAP ERP, international controlling, multinational enterprises, profit centers, and economic viability. It examines the practical application of SAP ERP for managing transfer prices within an international context and its implications for controlling and decision-making.

• Université: University of Applied Sciences Fulda
• Cours: Master of International Management
• Note: 1,7
• Auteur: Cenk Yildirim (Auteur)
• Année de publication: 2014
• Pages: 76
• N° de catalogue: V310976
• ISBN (ebook): 9783668099678
• ISBN (Livre): 9783668099685
• Langue: anglais
• mots-clé: flexible, management, transfer, prices, multiple, valuation, approach, based, context, international, controlling