Ideally, to check cam centerlines, the dial indicator should extend to reach the pushrod cup in the lifter. The indicator rod should run exactly the same path of motion as the lifter.
Centerline should be read as a set distance from max lift. Industry standard I believe to be .050 inch.
The reason this is important is because cam lobes can be (most likely are) asymmetrical. So any deviation from this number can skew the centerline slightly.
If you then measure from the pushrod at the original angle, you can then see the phenomena of cosine error.
The only way lash can affect centerline is if your reading is based off zero lift (valves closed) at the retainer.
Which is just an indicator of the combined errors of the system including the asymmetric cam lobe.
If you measure from the retainer at .050 cam lift, the numbers will be exactly the same. If the rockers have any ratio to them, this will skew the numbers from not being the same position on the asymmetric cam lobe.
Of course, for tech, you must use the same method as the tech man.