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Cash generating unit

This topic has 4 replies, 3 voices, and was last updated 1 year ago by Stephen Widberg.

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August 11, 2023 at 1:46 pm #689743
akka17bakka
Participant
- Topics: 104
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Hello Tutor,
Can a factory on its own be a CGU.?
August 11, 2023 at 3:33 pm #689749
parag
Participant
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m not a tutor but my two cents says it is.
Back office operation like finance or admin who dont generate cash flow on their own arent.
August 12, 2023 at 5:38 pm #689798
Stephen Widberg
Keymaster
- Topics: 15
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No. Imagine you make tables in Factory A and chairs in Factory B.
CGU A will be Factory A plus half the finance and admin.
CGU B will be Factory B plus half the finance and admin.
🙂
August 13, 2023 at 8:22 am #689833
akka17bakka
Participant
- Topics: 104
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I am sorry I didn’t understand it.
Does that mean Factory A is a CGU along with it admin and finance? Isn’t admin and finance a part of the factory?
August 14, 2023 at 4:24 pm #689897
Stephen Widberg
Keymaster
- Topics: 15
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Factory plus admin and finance is split in two forming 2 CGUs.
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