Project Accounting describes the role of the accountant in designing a cost collection system for a project, charging expenses to it, and measuring the amount of revenue to be recognized. Accounting expert Steven M. Bragg also addresses the management of change orders, allowances, and contingencies, while noting the impact of GAAP requirements on specific project issues, including interest capitalization and the treatment of research and development costs. The controls and measurements used for projects are also discussed, giving you a complete picture of the entire process of accounting for projects.
Upon successful completion of this course, participants will be able to:
- Identify the key characteristics of a project.
- Note the pricing calculation methods for project contracts, as well as the issues associated with the different profit recognition methods.
- Recognize the different types of direct costs associated with a project, as well as the costs incurred to obtain a contract.
- Note the circumstances under which allowances are included in a project budget.
- Recognize the circumstances under which interest is capitalized.
- Identify the circumstances under which the costs associated with internal-use software development and website development should be capitalized or charged to expense.
- Note the controls related to the assignment of costs and the calculation of the percentage of completion.
- Identify the contents of the formulas associated with the analysis of projects.
Table of Contents
Chapter 1 – Overview of Project Accounting
The Project Accountant
Chapter 1 – Review Questions
Chapter 2 – Project Pricing, Billing and Revenue
Project Pricing Methodologies
Cost Plus Pricing
Fixed Fee Pricing
Project Revenue Recognition
Change in Estimate
Percentage of Completion Method
Completed Contract Method
Treatment as Separate Contract
Treatment as Continuing Contract
Entitlement to Payment
Measurement of Progress Completion
Chapter 2 – Review Questions
Chapter 3 – Project Costs
Costs to Obtain a Contract
Information Organization and Presentation
Separate General Ledger / Subledger Accounts
Separate Accounting Module
Chapter 3 – Review Questions
Chapter 4 – Project Cost Management
Cost Variance Reporting
Change Order Management
The Sunk Cost Consideration
Chapter 4 – Review Questions
Chapter 5 – Interest Capitalization
Overview of Capitalized Interest
When to Capitalize Interest
The Interest Capitalization Period
The Capitalization Rate
Calculating Interest Capitalization
Chapter 5 – Review Questions
Chapter 6 – Additional Project Accounting Topics
Research and Development Costs
Website Development Costs
Chapter 6 – Review Questions
Chapter 7 – Project Controls
Controls for Cost Plus Pricing Arrangements
Controls for Fixed Fee Pricing Arrangements
Controls for Internal Projects
Chapter 7 – Review Questions
Chapter 8 – Project Measurements
Net Present Value
Return on Assets
Free Cash Flow
Chapter 8 – Review Questions
Review Question Answers and Rationales
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