Project management is the process of leading a team to achieve specific goals and objectives within a defined timeline, scope, and budget. Effective project management involves planning, organizing, and controlling resources to achieve successful project outcomes.

Objectives

The primary objective of project management is to deliver a project that meets or exceeds stakeholder expectations. The key objectives of project management include:

1. Defining project scope, goals, and deliverables
2. Developing project plans and schedules
3. Estimating resource requirements and budgets
4. Managing project risks and issues
5. Monitoring project progress and performance
6. Communicating with project stakeholders
7. Ensuring project quality and standards are met
8. Closing the project and conducting a project review

Project Lifecycle

A project typically goes through four phases: initiation, planning, execution, and closure. Each phase has specific deliverables and objectives that must be met to move to the next phase.

1. Initiation: In this phase, the project is defined and a business case is developed to justify the investment of resources in the project. The project manager is appointed, and the project charter is created.
2. Planning: In this phase, the project team develops a detailed project plan that outlines the scope, deliverables, timelines, resources, and budget for the project. The project plan also includes a risk management plan and a quality management plan.
3. Execution: In this phase, the project team works on the tasks outlined in the project plan. The project manager is responsible for managing the team, monitoring progress, and resolving issues as they arise.
4. Closure: In this phase, the project is completed, and the project team conducts a post-project review to evaluate project success and identify areas for improvement.

Faithful Representation

Faithful representation means that the actual effects of the transactions shall be properly accounted for and reported in the financial statements. The words and numbers must match what really happened in the transaction. The ingredients of faithful representation are completeness, neutrality and free from error.

Enhancing Qualitative Characteristics

Verifiability

Verifiability implies consensus between the different knowledgeable and independent users of financial information. Such information must be supported by sufficient evidence to follow the principle of objectivity.

Comparability

Comparability is the uniform application of accounting methods across entities in the same industry. The principle of consistency is under comparability. Consistency is the uniform application of accounting across points in time within an entity.

Understandability

Understandability means that accounting reports should be expressed as clearly as possible and should be understood by those to whom the information is relevant. Timeliness: Timeliness implies that financial information must be presented to the users before a decision is to be made.

Statement of cash flows

The statement of cash flows considers the inputs and outputs in concrete cash within a stated period. The general template of a cash flow statement is as follows: Cash Inflow - Cash Outflow + Opening Balance = Closing Balance

Example 1: in the beginning of September, Ellen started out with $5 in her bank account. During that same month, Ellen borrowed $20 from Tom. At the end of the month, Ellen bought a pair of shoes for $7. Ellen’s cash flow statement for the month of September looks like this:

• Cash inflow: $20
• Cash outflow:$7
• Opening balance: $5
• Closing balance: $20 – $7 + $5 = $18

Example 2: in the beginning of June, WikiTables, a company that buys and resells tables, sold 2 tables. They’d originally bought the tables for $25 each, and sold them at a price of $50 per table. The first table was paid out in cash however the second one was bought in credit terms. WikiTables’ cash flow statement for the month of June looks like this:

Important: the cash flow statement only considers the exchange of actual cash, and ignores what the person in question owes or is owed.

Statement of financial position (balance sheet)

The balance sheet is the financial statement showing a firm’s assets, liabilities and equity (capital) at a set point in time, usually the end of the fiscal year reported on the accompanying income statement.

• fixed assets
  • property
  • building
  • equipment (such as factory machinery)
• intangible assets
  • copyrights
  • trademarks
  • patents
    • pending
    • international
• goodwill

Owner’s equity, sometimes referred to as net assets, is represented differently depending on the type of business ownership. Business ownership can be in the form of a sole proprietorship, partnership, or a corporation. For a corporation, the owner’s equity portion usually shows common stock, and retained earnings (earnings kept in the company). Retained earnings come from the retained earnings statement, prepared prior to the balance sheet.