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Implementation of Value-Based Budgeting System at Ukrainian Enterprises


  • Maksym Chut

    (Chernihiv National University of Technology, Chernigiv, Ukraine)


The purpose of the article is to study the existing experience of using modern tools of cost-oriented budgeting to identify opportunities for its wide use in the enterprises of Ukraine. Problems and features of the implementation of the value-based budgeting system at the enterprises of Ukraine were revealed and most significant characteristics of value-based budgeting were summarized. It was determined that value-based budgeting is a modern approach to enterprise management, aimed at a steady growth of its market value, taking into account the interests of all interested parties. The advantages of value-based budgeting are the ability to develop a strategy and financial guidelines for the enterprise activities aimed at maximizing its market value with maximum consideration of its owners and shareholders' interests. To do this, it is necessary to take into account all short- and long-term goals of the enterprise development through integration of the indicators that reproduces growth of its market value in its system of budgets, budget planning of cash flows and investment attractiveness. The introduction of cost benchmarks into the budgeting system forms a management model that meets the requirements of the time and allows the company to gain market benefits and maximize its value. It was shown that necessity of forming the concept of value-based management at domestic enterprises is due to certain factors, in particular, the lack of a rational system of cost management; estimation of enterprise activity, based on the financial statements; weak spread of corporate governance, strategic planning and cost-oriented budgeting; insufficient competence of employees, making it difficult to move from operational management to cost-oriented management; the need for new principles and approaches to creating sound management systems. Unlike approaches aimed at maximizing profits, the concept of value-based management implies the provision of sustainable income in the long run.

Suggested Citation

  • Maksym Chut, 2019. "Implementation of Value-Based Budgeting System at Ukrainian Enterprises," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 109-117, June.
  • Handle: RePEc:iaf:journl:y:2019:i:2:p:109-117

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    More about this item


    budgeting; market value of company; cash flows; profits; value-based management;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


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