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3.9 Budgets (HL)

Unit 3.9 Budgets (HL only)

Learning outcomes

"Teaching kids to count is fine, but teaching them what counts is best."
- Bob Talbert, American award-winning journalist

A budget is a detailed financial plan for the future, usually involving the expected costs and revenues or a cash flow forecast, for a pre-determined period of time. A budget is produced in order to help a business to achieve its organizational objectives and to plan for the finances needed to implement business strategy.

The learning outcomes (or assessment objectives) for this section of the IB Business Management syllabus are:

  • The difference between cost and profit centres (AO2)

  • The roles of cost and profit centres (AO2)

  • Constructing a budget (AO2, AO4)*

  • Variances (variance analysis) (AO2, AO4)

  • The importance of budgets and variances in decision-making (AO2)

 Teacher only box

Note to teachers

Please note the following changes to the new course (first exams 2024) for this part of the syllabus.

  • "The importance of budgets for organizations (AO2)" has been renamed as "The importance of budgets and variances in decision-making (AO2)".

  • The difference between cost and profit centres (AO1) has been elevated to an AO2.

  • Candidates are now expected to be able to construct a budget (AO2, AO4). This was not an expectation in the previous course (final exams N23).

  • Finally, but of great importance, please note there has been a change in the budget format under the presentation of financial statements (Figure 11, page 63 of the guide, re-published in May 2022). This supersedes the format that appeared in the guide first published in February 2022.

Please be aware of the above points if/when using resources for the previous syllabus, such as past IB examination papers and mark schemes.

 InThinking Business Management resources

Click the hyperlinks below to access the InThinking resources for this particular section of the IB Business Management syllabus.

Return to the Unit 3 - Finance and accounts homepage

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