Group company purchases - Invoicing

BMA

Hi, I am responsible for controlling certain expenditure across 3 UK group companies (A, B and C) and accounting for that expenditure. The 3 companies in question are subsidiaries of a fourth parent company. Most purchases for the 3 companies are placed by company A which both company B and C benefit from. I therefore believe it right to invoice companies B and C to the value of the economic benefit transferred. However, after talking with my manager, on certain large value topics, I have been told not to do this and to keep the cost and related budget in company A. There is also a transfer pricing agreement in place to make sure company B and C make a certain profit.

My question is therefore - Is there an issue with not invoicing companies B and C?

MissP

Why has no one answered this question? I'm very curious as to the outcome. I think perhaps invoicing B and C would seem like a duplicate entry but if they are receiving economic benefits then how should this be treated in the accounts?

Thanks...