3 ms·

In big corpos such departments usually have their very own budget, and operate as a quasi-separate entity from the others. Paying fees inter-departments is a ve

In big corpos such departments usually have their very own budget, and operate as a quasi-separate entity from the others. Paying fees inter-departments is a very common thing.

andsoitis 3y ago
In which case the post I responded to is a red herring because they claim (without evidence) that the transfer pricing is happening in the case of YouTube Music and Apple Music.
- bryanlarsen 3y ago
  Still applies. Apple Music and YouTube Music may show losses because of the transfer fees they pay. But Apple & Google can then decide to keep them around even with their paper losses because they make other divisions more profitable.
  - andsoitis 3y ago
    And that is precisely why I concluded it is a silly thing to say that transfer pricing would "level the playing field" for other music competitors.
wkat4242 3y ago
Hm yes but in general if this happens too much it's frowned upon. Because all the bookkeeping to shift money within the same company actually costs money for no real reason. If this happens a lot the department bearing the cost is usually compensated with a bigger budget.
- scarface_74 3y ago
  I took an entire course on this in graduate school - Management Accounting. Every large company does it. My department at AWS “billed” by AWS when any of us set up our own internal AWS accounts.
  - wkat4242 3y ago
    Yeah but it's often not real billing. It's just to put a price on it so internal departments don't waste a ton of company resources because it's 'free'. I work for a very large enterprise also and we've been instructed to stop internal billing for everyhing less than 10k, and everything above 100k must be compensated in other ways, like shifting of responsibilities or personnel between teams. This was done because various departmental interests were basically trying to 'make money' at the expense of other internal departments and creating a complex mesh of internal contracts that was only wasting a huge amount of overhead :) The problem with this thing is that it can become a goal of its own and some departments think they are making a ton of money even though they're only shifting internal funds and causing huge expenses in finance.

In big corpos such departments usually have their very own budget, and operate as a quasi-separate entity from the others. Paying fees inter-departments is a very common thing.

andsoitis 3y ago

In which case the post I responded to is a red herring because they claim (without evidence) that the transfer pricing is happening in the case of YouTube Music and Apple Music.

bryanlarsen 3y ago
Still applies. Apple Music and YouTube Music may show losses because of the transfer fees they pay. But Apple & Google can then decide to keep them around even with their paper losses because they make other divisions more profitable.
- andsoitis 3y ago
  And that is precisely why I concluded it is a silly thing to say that transfer pricing would "level the playing field" for other music competitors.

wkat4242 3y ago

Hm yes but in general if this happens too much it's frowned upon. Because all the bookkeeping to shift money within the same company actually costs money for no real reason. If this happens a lot the department bearing the cost is usually compensated with a bigger budget.

scarface_74 3y ago
I took an entire course on this in graduate school - Management Accounting. Every large company does it. My department at AWS “billed” by AWS when any of us set up our own internal AWS accounts.
- wkat4242 3y ago
  Yeah but it's often not real billing. It's just to put a price on it so internal departments don't waste a ton of company resources because it's 'free'. I work for a very large enterprise also and we've been instructed to stop internal billing for everyhing less than 10k, and everything above 100k must be compensated in other ways, like shifting of responsibilities or personnel between teams. This was done because various departmental interests were basically trying to 'make money' at the expense of other internal departments and creating a complex mesh of internal contracts that was only wasting a huge amount of overhead :) The problem with this thing is that it can become a goal of its own and some departments think they are making a ton of money even though they're only shifting internal funds and causing huge expenses in finance.