ZERO BASED BUDGET Definition

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ZERO BASED BUDGET is where the expenses or costs of the prior year are not taken into consideration when establishing expense or budgetary levels looking forward. Each expense category starts from zero. All expenses or cost levels within the budget must be justified or re-justified as being necessary; thus "zero-base".

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APB 29 (Accounting Principles Board Opinion No. 29) Accounting for Non-monetary Transactions states that an exchange of non-monetary assets should be recorded at fair value. Certain modifications to that basic principle are contained in paragraphs 20-23 of APB No. 29. Paragraph 21(b) provides that accounting for an exchange of productive assets for similar productive assets should be based on the recorded amount of the non-monetary assets relinquished. However, Paragraph 4 of APB No. 29 states that Opinion is not applicable to business combinations.

ORGANIZATIONAL ENABLERS are the skills and knowledge, the tools and resources, and the culture of the organization that will enable it to achieve strategy.

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