zero-base budgeting

Method of budgeting for future expenses in which all expenditures must be justified each accounting period, as opposed to budgeting based on previous year's allocations. With zero-base budgeting, all budget lines start at zero and are determined by merit, rather than more traditional budgeting that incrementally adjusts previous allocations.


Zero-based budgeting is generally implemented to improve resource allocation, as pervious assumptions and the legacy of previous budgets may more easily be discarded in place allocations that fit more recent circumstances.

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