Reference no: EM132937883

A rolling budget, also called a continuous budget, is constantly updated. In essence, a rolling budget is kept current by adding a period to the budget each time a period ends. For example, assume an annual budget is created for January- December 2015. When January 2015 ends,
the budget is revised for the period February 2015-January 2016. Thus, the budget remains annual, but the year is rolled forward by adding a month as each month passes by. Alternatively, the annual budget could be rolled forward by quarter, in which case it would be extended every three months. A rolling budget allows managers to incorporate new information into the organizational budget in a timely manner and get a feel for how that information affects annual (but not necessarily fiscal year) results. Thus, forecasts can be revised and the results of managerial actions can be incorporated monthly, with results still forecasted on an annual basis.

Question 1: What do you think?

Question 2: Are rolling budgets a valuable addition to the planning process?

Question 3: What information do rolling budgets provide that is not available in traditional quarterly and annual budgets?