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Non-Monetary Budgets

Concepts Behind Non-Monetary Budgets

Non-monetary budgets separate themselves from monetary budgets in terms of inclusion of cash or some equivalent of cash like bank deposits, cash in hand, accounts of investment, receivable accounts, receivable notes and all that can be converted into the certain amount of money. So non-monetary budget is the budget that a company keeps but for that amount it is not possible to calculate the money value. These are the budgets for which the money value may vary and changes rapidly over time. These types of budgets include assets which are intangible like copyrights, patents, property and inventory etc.

It's very difficult to make a clear distinction between monetary and non-monetary budgets as well as assets. The parameter that helps us to decide is whether the budget's overall value can be converted into the actual money or not. If the budget's value can be converted then its monetary budget else it is known as non-monetary budget.

Non-monetary budget includes the non-monetary assets as well as liabilities. All these liabilities cannot be compensated by the cash payments. One can come to know about the money value but these liabilities actually show the obligations with respect to the services. The budget may be non-monetary whose value cannot be converted into the money value but these liabilities and budgets are also reflected in company's balance sheet. Monetary budgets are quantifiable in terms of fixed amount of value while the money value of non-monetary budget and asset changes over time with respect to the economy and market conditions.

Budgets also include the incentives. So, the reward types also forms one of the distinguishing parameter between monetary and non-monetary budgets. Transaction budgets cannot be considered as complete without considering the non-monetary transactions. These are the ones that do not lead to funds transfer between the accounts. Changing the address or performing complex calculations in the financial sector can be considered to be a part of the non-monetary budgets. If one exchanges the assets like transferring of the inventory or property it's known to be a non-monetary transactional budget. Non-monetary budgets and transactions can be one ways or two ways. If we consider two ways non-monetary budgets then they involve two or more than two parties who exchange monetary goods and services. One way non-monetary budgets include the transferring of goods from one party to other like transferring items to another organisation. Monetary budgets that are a form of the monetary incentives are offered in form of some bonus. Non-monetary budgets usually aim to appreciate the employee when he performs good job at work. Although this doesn't stand to be true for all the cases of non-monetary incentives but it's true that these rewards do not hold a valid meaning for all the employees. Be it monetary or non-monetary incentive: both of them can be very effective at the workplace but the degree of variation may be there. Monetary incentives play a very important role when the employee suffers from any medical emergency because some form of payment adds a great value on such cases.

Difficulties Encountered In Non-Monetary Budgets

One of the major challenges and problems that come along with the non-monetary budgets is that there is a lot of uncertainty involved about the value in the future regarding few non-monetary advantages and the existing dependency of the employees on non-monetary parameters. Non-monetary budgets comprises of non-monetary compensation and non-monetary liabilities that both pose lot of difficulties. As there is always an uncertainty involved in the future value and the chances of the employees showing too much dependence on non-monetary benefits has to be considered. So there are many real time problems in this domain that students feel are difficult to address and consider and hence are unable even to solve their assignments in this area. This subject demands a lot of in depth study about the implications it has on economy and the market. But students these days are so much burdened with the work that they are not even able to spend time on the literature survey of this domain.

Help with Non-Monetary Budgets Assignment - Homework

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