A method used in a number of organisations to reallocate the costs of some activity to the appropriate profit or cost centre. Also used where assets of the company are used as security for a loan - these assets being cross charged to the loan giving additional comfort for the loan provider and helping reduce their risk.
Mega complex Corporations, multiple divisions, great Corporate Headquarters - all held together from a banker's point of view by cross charges and guarantees. These are security arrangements put in place to make sure that if a Corporation goes belly up, then the banks get all their money out first.
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