Pricing Decisions and Borrowing Costs under International Accounting Standard 23 in Jordanian Industrial Corporations

Abstract

This study investigates how corporations borrowing costs (BC) under IAS 23 will be impacted on pricing decisions (PD) in industrial corporations, Study population of Jordanian industrial corporations, listed on the Amman Stock Exchange for the year 2015 is made up, the number of these corporations stood at 92 industrial corporations, study sample including all corporations availability information to calculate the variables of study during the study period, the number 70 industrial corporation, used three, depending variables, that is pricing decisions, cost-plus price (CPP), contribution margin Price (CMP), and target costing price (TCP), the independent variable is (BC), this, the variables because the increase of dependence on the borrowing lead to increase the cost of  finance and  loading of corporations for expenses, that effect on net profit realize and  loading the service or product for (BC), thus impact on service or product price. Hilton (2005). The simple regression used to test hypotheses.This study indicated to an impact on profit when the capitalization of (BC) for using (CPP) and (CMP) method. There is no impact on profit for using the (TCP) method, but leading to increase competitive advantage a to product, increase the team ability and benefits of the product.

Keywords: Pricing decision making, Cost-Plus Price, Contribution Margin Price, Target Costing Price, Borrowing Costs.