Cost Centre (Cost Center)
Accounting glossary · Understand, connect, apply
A cost centre is an organisational segment for which costs are collected and a manager is normally accountable for managing those costs and the associated work.
Example
A maintenance department tracks staff time, spare parts and service quality against its maintenance budget. It does not normally set the company’s selling prices.
Remember the difference
Lower spending alone is not proof of better performance. Deferred maintenance can reduce this month’s cost while increasing breakdowns later. Review output, quality and controllability as well.
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Published 4 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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