KEY ACCOUNTING PROBLEMS RELATED TO THE STRATEGIES OF INTERNATIONAL TRANSFER PRICING IN MODERN GLOBALLY OPERATING COMPANIES
Authors: Petrova Diana 
Published: September 2021

This paper treats the role and significance of international transfer pricing in the activities of modern globally operating companies in the contemporary conditions of constantly increasing globalization of the world economic area. The main goals and tasks pursued by the mechanism of international transfer pricing in the hyper competitive, highly risky and dynamically changing global business environment are explained. The key accounting problems related to the processes of planning, analysis and control of specific strategies of international transfer pricing in the globally oriented companies are discussed. The rapid development of globalization processes in contemporary conditions determines the growth of the significance and application of international transfer pricing in the activities of modern globally operating companies. Increasing the degree of their economic integration and the amount of their intra-corporate exchange, as well as the increasing complexity of their international transactions, make international transfer pricing one of the most important and topical problem that is faced by these companies.The main goal pursued by the mechanism of international transfer pricing is to optimize activities and maximize overall profits for the company as a whole on a global basis. The accounting problems that may arise in connection with international transfer pricing in modern globally operating companies are in two main aspects:  problems in terms of information provision of the internal management processes that occur in the different subsidiaries and within the company as a whole;  problems in providing the necessary accounting information for the purpose of compiling the financial statements and satisfying the information needs of the interested external users. The accounting information system of globally operating companies should be able to meet the information needs of their distinctive uniform system of making decisions aimed at coordinating goals on a global basis, successfully implementing the global strategy and optimizing resources and results globally. The accounting must provide adequate information needed to make sound management decisions concerning the policy of international transfer pricing that is implemented, to control the implementation of these decisions and subsequently to assess and analyze the results. A key problem for globally operating companies is implementing such a policy of international transfer pricing that ensures optimal results for the company as a whole and at the same time successful practical implementation of the requirement for consistency of the goals of all units operating within the overall organizational structure. Considerable difficulties arise in the objective assessment of costs and benefits of the application of transfer prices in the implementation of numerous and diverse international operations between the different constituent structural units of the company and the making of sound management decisions based on this.