What is a Single Entity?

A single entity is an operating unit for which financial information is reported. A single entity may be a separate legal entity, a subsidiary , department , or any other designation – as long as information is collected specifically for it, and decisions are made based on that information.

Example of a Single Entity

The following are all examples of single entities:

• Divisions . A tech company like Apple has separate divisions for iPhones, MacBooks, and services (e.g., Apple Music). Each division operates semi-independently with its own revenue and expense tracking.

• Subsidiaries . A multinational corporation like Google (under Alphabet Inc.) owns subsidiaries like YouTube, Google Cloud, and Waymo. Each subsidiary has its own financial reporting and operates as a distinct entity under the parent company.

• Business segments . A hotel chain like Marriott has business segments for luxury hotels, budget hotels, and resorts. These segments allow the company to track profitability for each category separately.

• Departments . A retail company like Walmart has departments such as groceries, electronics, and clothing. Financial performance is measured for each department to assess contribution to overall revenue.

• Branches or regional offices . A bank like JPMorgan Chase has regional branches that operate as independent units. Each branch tracks deposits, loans, and operational costs separately.

• Product lines . A car manufacturer like Toyota tracks sales and costs for different product lines, such as SUVs, sedans, and electric vehicles. This helps in evaluating the profitability of each vehicle category.

• Franchises . A fast-food chain like McDonald's tracks financials for each franchised location separately. Franchise owners report sales and expenses to the corporate office while operating independently.

• Projects or contracts . A construction company like Bechtel tracks financials for each major project separately, such as a bridge, highway, or skyscraper. This ensures proper budgeting and profitability assessment for each contract.