UK central costs


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If a group has many subsidiaries and each subsidiary has its own p&l, does the "central costs" means " head office costs" ? What is the difference between central costs and central services costs? I thought they are the same?
 
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Triest123

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If the Head Office "centralise" the function of the department (such as HR, Admin & Finance), then the costs incurred in such department is the central costs.

The central costs refer to those costs incurred by the Head Office (such as staff salaries, rent & utilities expenses). These costs would be allocated to the subsidiaries.

The central service costs means that the Head Office would charge its subsidiaries for providing services (such as Service fee or managment fee). The service fee views as "a package of costs" incurred by the Head Office (sometimes add a make-up on these costs) and then charged to its subsidiary.
 

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