Profit Centre (Profit Center)
Accounting glossary · Understand, connect, apply
A profit centre is a segment whose manager is evaluated on both revenues and costs, usually through a defined measure of profit. The manager needs meaningful influence over the measured activities.
Example
A branch reports revenue of 80,000 and controllable operating costs of 62,000, giving 18,000 before any separately identified head-office allocations.
Remember the difference
Segment profit depends on the cost definition used. Separate controllable results from imposed allocations, and do not assume that the branch manager controls financing or major investment decisions.
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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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