Project Management Accounting E-Book

Kevin R. Callahan

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Corporate F&A
• Sprache: Englisch

Seitenzahl: 288

Veröffentlichungsjahr: 2011

Beschreibung

Over the past few decades, Project Management has shifted from its roots in construction and defense into mainstream American business. However, many project managers' areas of expertise lie outside the perimeters of business, and most do not have the formal education in business, accounting, or finance required to take their skills to the next level. In order to succeed, today's project managers (PMs) who wish to soar to the top or remain at the helm of their profession need to have a comprehensive grasp of the business context within which they work. Providing a resourceful introduction to the interrelationships between finance, accounting, and Project Management, Project Management Accounting, Second Edition is designed to help PMs at various skill levels improve their business skills, provide advanced contributions to their organizations, and perform with greater proficiency.

Authors and industry experts Kevin Callahan, Gary Stetz, and Lynne Brooks combine their decades of Project Management experience and insights to provide professionals in the field with a 360-degree understanding of how costs interact with the general ledger. Through the authors' seasoned expertise, PMs are better equipped to assess all facets of a project with a broader understanding of the "big picture" to determine whether to continue as planned, find an alternative solution, or scrap the project altogether.

Rich with new content as well as many new case studies, this Second Edition of Project Management Accounting includes:

• Updated information on Project Management and its link to Project Accounting
• A new chapter on assessing risk when managing projects
• How to determine the greatest tax/cost savings
• Project Management in relation to a company's mission, objectives, and strategy
• Project Management in an agile business
• Coverage of agile Project Management as applied to software and technical projects
• New, updated, and timely case studies
• Sample checklists to help readers get started and apply concepts to their business

Project managers must make vital decisions every day that impact the schedule, costs, or resources committed to a given project. Project Management Accounting, Second Edition, provides the tools and skills to help PMs establish with greater certainty whether these costs should be capitalized or expensed to stay on budget and improve a company's bottom line.

Leseprobe

Contents

Cover

Content

Title Page

Copyright

Dedication

Preface

Acknowledgments

Chapter 1: Project Management and Accounting

Mission, Objectives, Strategy

Project Planning

Project Execution and Control

Chapter 2: Finance, Strategy, and Strategic Project Management

DuPont Method

Chapter 3: Accounting, Finance, and Project Management

Project Team and Financial Success

Calculating Return on Investment

STO Solution Model

Implementing Strategy throughout the Company

Conclusion

Chapter 4: Cost

Definition and Purpose of Cost

Cost Classifications

Cost Decisions

Cost of Quality

Cost and Industry

Manufacturing Industry

Conclusion

Chapter 5: Project Financing

Debt Financing

Corporate Bonds

Equity

Income Tax Effect

Cost Implications of the Funding Methodology

Conclusion

Chapter 6: Project Revenue and Cash Flows

Role of the Financial Manager

How to Calculate the Statement of Cash Flows for a Company

Free Cash Flows

Methods for Calculating a Project's Viability

Conclusion

Chapter 7: Creating the Project Budget

Introduction

Case Study: Pontrelli Recycling, Inc.

Planning for the Future

Creating a Project Budget

Review Project Financials

Project Cash Flow

Conclusion

Chapter 8: Risk Assessment

Risk to Your Reputation

Competency

Integrity and Honesty

Organizational Structure

Human Resources

Reports on Financial Statements

Project Specific Risk

Engagement Acceptance

Conclusion

About the Web Site

Index

End User License Agreement

List of Illustrations

Chapter 1: Project Management and Accounting

Exhibit 1.1 Strategic, Tactical, and Operational Model

Chapter 2: Finance, Strategy, and Strategic Project Management

Exhibit 2.1 DuPont Method in a Pyramid Format

Chapter 3: Accounting, Finance, and Project Management

Exhibit 3.6 Project Portfolio Management

Chapter 7: Creating the Project Budget

Exhibit 7.7 Work Breakdown Structure

Exhibit 7.11 Cash Flow Table in Graph Format

Chapter 8: Risk Assessment

Exhibit 8.1 Bell Curve

List of Tables

Chapter 1: Project Management and Accounting

Exhibit 1.2 Calculating Schedule Performance Index (SPI)

Exhibit 1.3 Estimate at Completion

Chapter 2: Finance, Strategy, and Strategic Project Management

Exhibit 2.2 Profitability Ratios

Exhibit 2.3 Activity Ratios

Exhibit 2.4 Solvency Ratios

Exhibit 2.5 Pontrelli Recycling, Inc. Balance Sheet and Statement of Operations

Exhibit 2.6 Patrick J. Romano, Jr., P.C. Balance Sheet and Statement of Operations

Exhibit 2.7 Calculated Financial Ratios

Exhibit 2.8 DuPont Method Traditional Worksheet Template

Chapter 3: Accounting, Finance, and Project Management

Exhibit 3.1 Marvelous Food Inc. Ratios

Exhibit 3.2 Marvelous Food Inc. Balance Sheet

Exhibit 3.3 Marvelous Food Inc. Income and Expense Statement

Exhibit 3.4 Marvelous Food's Project Cash Flow

Exhibit 3.5 Marvelous Food's Proposed Project Outcome

Chapter 4: Cost

Exhibit 4.1 Widget Budget

Exhibit 4.2 Cost Classifications

*

Exhibit 4.3 Differential Costs

Exhibit 4.4 Cost and Industry

*

Chapter 5: Project Financing

Exhibit 5.1 Average Rates of Returns for Years Ending 1926–2002

*

Exhibit 5.2 WACC Formula

Exhibit 5.3 WACC Formula Version 2

Exhibit 5.4 EVA Formula

Exhibit 5.5 Capital Charge Formula

Exhibit 5.6 MVA Formula

Exhibit 5.7 MVA Equation

Exhibit 5.8 Total Debt and Equity

Exhibit 5.9 After Tax Cost of Debt Equation

Exhibit 5.10 Cost of Capital Equation

Exhibit 5.11 Cost of Capital Percentage

Exhibit 5.12 Cost of Capital Equation

Exhibit 5.13 Beta Asset Equation Version 1

Exhibit 5.14 Beta Asset Equation Version 2

Exhibit 5.15 Beta Asset Equation with Calculations

Exhibit 5.16 Beta Equity Equation

Exhibit 5.17 Actual Cost of Capital Calculation

Exhibit 5.18 Capital Charge Equation and Calculation

Exhibit 5.19 EVA Calculation

Chapter 6: Project Revenue and Cash Flows

Exhibit 6.1 Statement of Cash Flows

Exhibit 6.2 Sample Statement of Cash Flows

Exhibit 6.3 Free Cash Flows

Exhibit 6.4 Operating Cash Flows Equation

Exhibit 6.5 Accounting Rate of Return Equation

Exhibit 6.6 Payback Period Equation

Exhibit 6.7 Sample Total Cost Outflows

Exhibit 6.8 Present Value Factors

Exhibit 6.9 Present Value Factors Applied to Projects A and B

Exhibit 6.10 Net Present Value Equation

Exhibit 6.11 Benefit-Cost Ratio

Exhibit 6.12 Ranking Priorities

Chapter 7: Creating the Project Budget

Exhibit 7.1 Income Statement Including Pro Forma 2011

Exhibit 7.2 Balance Sheet Including Pro Forma 2011

Exhibit 7.3 2010 Ratios Compared to 2011 Pro Forma

Exhibit 7.4 Pro Forma Income and Expense

Exhibit 7.5 Pontrelli Recycling, Inc.'s Pro Forma Balance Sheet

Exhibit 7.6 Pro Forma Profitability Ratios

Exhibit 7.8 Project Budget

Exhibit 7.9 Projected Income

Exhibit 7.10 Cash Flow Table

Exhibit 7.12 Effects of Cost Overrun

Exhibit 7.13 Effect of Project Overrun on Financials

Chapter 8: Risk Assessment

Exhibit 8.2 An Unqualified Opinion/Independent Auditors' Report

Exhibit 8.3 Qualified Opinion/Independent Auditors' Report

Exhibit 8.4 Adverse Opinion—Independent Auditors' Report

Exhibit 8.5 Disclaimer of Opinion—Independent Auditors' Report

Exhibit 8.6 Unqualified Opinion with Required Explanatory Language/Independent Auditors' Report

Exhibit 8.7 Independent Accountants' Review Report

Exhibit 8.8 Independent Accountants' Review Report with a Departure from GAAP

Exhibit 8.9 Independent Accountants' Compilation Report

Exhibit 8.10 Accountants' Compilation Report/Lack of Independence

Exhibit 8.11 Independent Accountants' Compilation Report/Substantially All Disclosures Omitted

Exhibit 8.12 Independent Accountants' Compilation Report/Major Uncertainty

Guide

Cover

Contents

Start Reading

Pages

iii

iv

v

xi

xii

xiii

xv

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

171

172

173

174

175

176

177

178

179

180

181

182

183

184

185

186

187

188

189

190

191

192

193

194

195

196

197

198

199

200

201

203

204

205

206

207

208

Project Management Accounting

Budgeting, Tracking, and Reporting Costs and Profitability

Second Edition

KEVIN R. CALLAHAN

GARY S. STETZ

LYNNE M. BROOKS

Copyright © 2011 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750–8400, fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748–6011, fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762–2974, outside the United States at (317) 572–3993 or fax [phone].

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com.

Library of Congress Cataloging-in-Publication Data:

Callahan, Kevin R.

Project management accounting: budgeting, tracking, and reporting costs and profitability/Kevin Callahan, Gary Stetz, Lynne Brooks.—2nd ed.

p. cm.

Includes index.

ISBN 978–0–470–95234–4 (hardback); ISBN 978–1–118–07821–1 (ebk); ISBN 978–1–118–07822–8 (ebk); ISBN 978–1–118–07820–4 (ebk)

1. Project management—Accounting. 2. Cost accounting. I. Stetz, Gary S., 1962- II. Brooks, Lynne M. III. Title.

HD69.P75C354 2011

657′.42—dc22

2011002028

ISBN-13: 978–0–470–952334–4