Intersegment Sales

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DEFINITION of 'Intersegment Sales'

The transfer or exchange of goods for monetary compensation from one department in a company to another department within the same company. Intersegment sales exists where a corporation has multiple segments or divisions, and product sales occur between these segments. A segment report containing data related to intersegment sales and transfers is typically included in a corporation's annual report.

INVESTOPEDIA EXPLAINS 'Intersegment Sales'

Segments are components of the same corporation or entity that provide products (or a group of products) that have different risks and returns than another segment. Intersegment sales can be manufacturing products, such as the sale or transfer of steel from one segment to another, or it can be a financial product, as with the banking and insurance industries. Accurate bookkeeping is important in order to correctly assign revenue and expenses related to the transfer or sales.

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