Film Accounting Glossary
Approved budget
What is the approved budget?
The approved budget is the version of the budget that the financier, studio, or completion guarantor has formally signed off on and against which all performance is measured.
Once approved it becomes the baseline for every variance, and changing it requires a documented amendment rather than a quiet re-type. Productions often carry both the approved budget and a working budget, with the difference explained in the cost report.
Example
The financier signs off at $8.4M. Six weeks later the schedule adds two days and the working budget reads $8.7M. The approved figure stays $8.4M, and the $300k appears as a variance with a written explanation, rather than the budget quietly becoming $8.7M.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Referenced by version and date in the financing documents, the completion bond, and the header of every cost report.
Common mistake
Quietly re-typing the budget when the schedule changes. It makes every variance vanish and destroys the one baseline the financier, the guarantor, and the cost report all rely on.
Related questions
- Can the approved budget be changed mid-production?
- Only by a documented amendment agreed with whoever approved it. Otherwise the change is reported as a variance against the original figure, with a written explanation.
- What is the difference between the approved and working budget?
- The approved budget is the frozen baseline everything is measured against. A working budget reflects current expectations, and the gap between them shows up as variance.