Definition
Cash-Generating Unit – Under IFRS/IAS 36, the smallest identifiable group of assets whose cash inflows are largely independent of other assets, used as the level at which goodwill is tested for impairment each year (rather than testing goodwill company-wide). Management builds a multi-year cash-flow forecast and discount rate for each CGU carrying goodwill; if the CGU's estimated recoverable value falls below its carrying amount, the shortfall is booked as an impairment charge — but if management's own growth and discount-rate assumptions stay optimistic enough, a CGU that's actually struggling can carry unimpaired goodwill for years. Found In: Notes to Financial Statements (goodwill/intangible assets)