Transfer pricing: early Italian contributions

Abstract

This paper aims at reviewing the early contributions made by Italian scholars to the field of transfer pricing, from the works of Francesco Villa (1840, 1853) to the birth of Economia Aziendale (in the first half of the twentieth century). Although this topic has been traditionally overlooked in the Italian accounting literature, this study shows how Italian accountants were familiar with different methods of transfer pricing and elaborated certain original solutions. The intensive, mainly theoretic discussion for attaching a value to goods exchanged amongst segments of the same company indicates an early recognition of the potential influence of organizational structure, intermediate markets, coordination and differentiation that may have laid the platform for a greater integration between financial and cost accounting. Unfortunately this genuine debate suddenly stopped: the diffusion of Zappa's theories partly explains this phenomenon.