Implementing cross charge for the organizations within an entity enables you to use the resource of a provider organization and charge the receiver organization for the cost incurred on the rendered service. If you use borrowed and lent accounting, then you can pass costs based on transfer price rules and share revenue between the provider and receiver organizations without generating physical, internal invoices.

Defining Transfer Price Rules
Define transfer price rules at the business group level to determine how Oracle Projects calculates the transfer price for cross charged transactions.
Each rule consists of attributes that you can define:

• Rule name, type, description, and effective dates
• Basis and calculation method
• Rate (percentage) at which to apply the rule

Changes to transfer price rules affect only future transactions. To change a previously processed transaction, adjust the transaction manually from the Expenditure Items window.

Before you define a transfer price rule, you must define the bill rate or burden schedule that you want to use in the rule (if applicable).

To define a transfer price rule:
Navigate to the Transfer Price Rules window.

1. Enter a unique name for the rule, select a type (Labor or Non-Labor), and specify a description and the effective dates.
Note: Transfer price rule names must be unique within a business group if you are using Single Business Group Access. For Cross Business Group Access, transfer price rule names must be unique across the system.

2. For the [ ] field (descriptive flexfield), enter the information specified by your system administrator.

3. For Basis, select Raw Cost, Burdened Cost, or Revenue.

4. Select one of the calculation methods described in the following table to use to determine the transfer price:
    
5. For Apply, enter a percentage (zero or any positive number).
The percentage is the amount of a markup or discount to the transfer price amount calculated by the rule. Numbers less than 100 indicate a discount, and numbers greater than 100 indicate a markup. For example, to give a 20% discount on a bill rate, enter 80.