The smallest identifiable group of assets that generates its own cash inflows. In other words, this unit (or group of assets) generates its cash flows independently of other assets or units- i.e., without interaction with other assets or units in an entity. This is contrary to an individual asset that usually generates cash flows as part of a unit, but not by its own.

Independence of cash flows is usually considered on a gross rather than net basis. That is, cash-generating units are typically identified on the basis of independent cash inflows rather than independent net cash flows. This implies that shared outflows (infrastructure and marketing costs) are not a factor in identifying such units.