When comparing actual results to budgeted amounts, what is this difference called?

The difference between actual results and budgeted amounts is referred to as budget variance. This concept is critical in financial management and budgeting processes, as it highlights discrepancies between what was planned and what has been achieved financially.

Understanding budget variance allows organizations to assess their financial performance more accurately. It can indicate whether operations are over or under budget, helping management to identify areas that are performing well and those that may need attention. This insight is essential for making informed financial decisions and adjustments moving forward.

In contrast, budget reconciliation typically refers to the process of ensuring that budget records match actual expenditures, while forecast adjustment involves modifying projections based on updated information or changing circumstances. Cost analysis, on the other hand, involves examining and evaluating the costs associated with a business or project rather than comparing actual figures to budgeted amounts.