Dual transfer pricing — Accounting glossary

Dual transfer pricing records the same internal transfer at different values in the selling and buying divisions’ performance accounts. For example, the seller may receive a market-based credit while the buyer is charged a relevant-cost amount, with the difference reconciled centrally. It can support motivation and group decisions when a single price creates conflict, but it complicates reporting and may conceal inefficient resource use. It does not create additional external group profit or remove legal tax-pricing requirements for separate entities.

Worked example

For 100 internally transferred units, the seller receives a $30-per-unit credit and the buyer a $22-per-unit charge. The $800 difference must be reconciled centrally; the group has not earned $800 from an outside customer.

Common mistake

Confusing dual transfer pricing with a linear-programming dual price, which means a shadow price.

Where it appears in your exams

Qualification	Exam	Relationship	Period
ACCA	PM	Supporting	September 2026–June 2027