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    Accounting Dictionary

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    Cash-Generating Unit


    Definition:
    A cash-generating unit is the smallest group of assets that independently generates cash flow and whose cash flow is largely independent of the cash flows generated by other assets. The concept is used by the international financial reporting standards in the determination of asset impairment. Without the cash-generating unit concept, it would be excessively difficult to determine the cash flows associated with individual assets for an impairment analysis.