basis of apportionment

Quick Reference

The basis used for the apportionment of costs between a number of cost centres when the costs are to be shared between them equitably. This occurs when an overhead cannot be directly assigned to one particular cost centre. For example, rent and business rates are seldom incurred by individual cost centres, therefore floor area is often used as a basis of apportionment to share the costs between appropriate cost centres. See also allocation base.

Subjects: Accounting.

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