Budget Law and Legal Definition

Budget is an itemized listing of the amount of all estimated revenue which a given business anticipates receiving and a listing of the amount of all estimated costs and expenses that will be incurred in obtaining the above mentioned income during a given period of time. The purpose of budgeting is to provide a forecast of revenues and expenditures i.e. construct a model of how a business might perform financially speaking if certain strategies, events and plans are carried out. It also enables the actual financial operation of the business to be measured against the forecast. A budget is typically for one business cycle, such as a year, or for several cycles (such as a five-year capital budget).