Cash-Generating Unit (CGU)
Accounting glossary · Understand, connect, apply
A cash-generating unit is the smallest identifiable group of assets whose cash inflows are largely independent of the inflows generated by other assets or groups.
Example
A bakery’s ovens, mixers and shop fittings work together to produce the shop’s sales. If those shop receipts are largely independent, the shop may be the relevant unit.
Remember the difference
A cost centre is based on how costs are tracked. A cash-generating unit is identified by cash inflows, so it can cross internal cost-reporting boundaries.
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Published 9 November 2026. Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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