Capital Budgeting Practices in Non-manufacturing Companies in Poland

  • Tomasz Wnuk-Pel University of Lodz
Keywords: management accounting, capital budgeting, non-manufacturing firms


This paper aims at analyzing the diffusion of investment appraisal methods in non-manufacturing companies Poland. In particular, it deals with the relationships between the methods used and the selected characteristics of companies. The questionnaire was completed in 2012 by representatives of non-manufacturing companies operating in Poland and focused on three areas: (a) general firm characteristics, (b) organization of investment process, (c) investment evaluation methods used.

The questionnaire research has shown that service companies in Poland use the same investment appraisal methods as companies in more developed countries; however, the diffusion of these methods is less. What is more, a foreign origin of equity capital, the magnitude of the capital expenditures budget, and a company size have significant and statistically positive influence on the investment appraisal methods in use, especially on: (a) formalization of the investment appraisal process, (b) the use of discounted cash flows – DCF methods, (c) employment of risk assessment methods, and (d) audit after closing the investment process.

The author believes that the study bridges the gap in management accounting literature and researchers will use the results of this study to question current ideas and develop new theories. The results of the conducted study may also help practitioners identify the areas in their companies where academic recommendations have not been implemented and their use could be beneficiary for the company due to the fact that they facilitate activities which create value of the company.