We get into budgets and budgeting in Ch 6 in a few weeks, but here is an something I came across now that presents an interesting budgeting concept called zero-base budgeting.

http://www.economist.com/node/13005039

Peter Pyhrr, a manager at Texas Instruments (TI) in Dallas, developed the idea of zero-base budgeting. Each year he prepared his budgets as if last year’s figures had not existed. Every assumption had to be rethought from scratch and then justified. It was not acceptable to use last year’s expenditure as a benchmark for this year’s budgeted costs, and then only to have to justify the increase in that expenditure. In effect, zero-base budgeting treats all claims on financial resources as if they were entirely new claims for entirely new projects.