give me information .. aim and objective for account project
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Project accounting is a specialised form of accounting that corresponds to the ever-evolving needs of project delivery, which helps adequately track, report and analyse financial results and implications.[1] This includes the practice of creating financial reports specifically designed to track the financial progress of projects, which can then be used by managers to aid project management.[2]
Traditionally, project accounting and its principles were largely used to track and report predominantly large construction, engineering and government projects. Today, project management delivery methodologies have expanded into several other sectors, including financial, technology and legal. Subsequently, project accounting has needed to follow to cover these areas to ensure corresponding financial tracking and financial implications are understood and considered.
The need for project accounting arose as a specialised field from the nature of projects being treated as separate temporary individualised entities set up for the purpose of delivering one or more business products.[3] As the nature of each project may be different from the business-as-usual activities run by the business, existent management accounting and financial accounting skills were recognised as insufficient to accurately advise on the treatment and financial reporting of a project. Hence, a new field emerged within the accounting sphere – project accounting.[1]
Project accounting therefore includes:
A separate accounting system or cost centre to track and report project specific transactions, with project revenues, costs, assets and liabilities identified and allocated to the project.
Frequent reporting, with the frequency often increasing as the project approaches completion.
A layer of simplified reporting, including key performance indicators relevant to whether the project is on or off track. For instance traffic lights on a dashboard.
A process for identifying project related transactions in the main accounting system and allocating or apportioning these to the project accounting system.
Forecasting of costs to complete the project. Key stakeholders are often not only focused on the costs incurred to date, but also those committed and the expected final cost.[2]
Projects differ from the day-to-day business-as-usual (BAU) activities in that they frequently cross organisational boundaries, may last for anything from a few days or weeks to a number of years, during which time budgets may also be revised many times. They may also be one of a number of projects that make up a larger overall project or program.[4]
Consequently, in a project management environment costs (both direct and overhead) and revenues are also allocated to projects, which may be subdivided into a work breakdown structure, and grouped together into project hierarchies. Project accounting permits reporting at any such level that has been defined, and often allows comparison with historical as well as current budgets.[5]
Project accounting is commonly used by government contractors, where the ability to account for costs by contract (and sometimes contract line item, or CLIN) is usually a requirement for interim payments.[5]
Percentage-of-completion is frequently independently assessed by a project manager, program management officer (PMO) and project accountant. It includes the continuous recognition of revenues and income related to longer-term projects. By doing this, the seller is able to identify some gain or loss relevant to a project in every accounting period that is ongoing active. Funding advances and actual-to-budget cost variances are calculated using the project budget adjusted to percent-of-completion.[6][7]
Where labor costs are a significant portion of overall project cost, it is usually necessary for employees to fill out a timesheet in order to generate the data to allocate project costs.[6][8]
The capital budget processes of corporations and governments are chiefly concerned with major investment projects that typically have upfront costs and longer term benefits. Investment go / no-go decisions are largely based on net present value assessments. Project accounting of the costs and benefits can provide crucially important feedback on the quality of these important decisions.[5]
An interesting specialised form of project accounting is production accounting, which tracks the costs of individual movie and television episode film production costs. A movie studio will employ production accounting to track the costs of its many separate projects.[5]
Please mark me brainliest. I beg you
Please mark me brainliest
Project accounting is a specialised form of accounting that corresponds to the ever-evolving needs of project delivery, which helps adequately track, report and analyse financial results and implications.[1] This includes the practice of creating financial reports specifically designed to track the financial progress of projects, which can then be used by managers to aid project management.[2]
Traditionally, project accounting and its principles were largely used to track and report predominantly large construction, engineering and government projects. Today, project management delivery methodologies have expanded into several other sectors, including financial, technology and legal. Subsequently, project accounting has needed to follow to cover these areas to ensure corresponding financial tracking and financial implications are understood and considered.
The need for project accounting arose as a specialised field from the nature of projects being treated as separate temporary individualised entities set up for the purpose of delivering one or more business products.[3] As the nature of each project may be different from the business-as-usual activities run by the business, existent management accounting and financial accounting skills were recognised as insufficient to accurately advise on the treatment and financial reporting of a project. Hence, a new field emerged within the accounting sphere – project accounting.[1]
Project accounting therefore includes:
A separate accounting system or cost centre to track and report project specific transactions, with project revenues, costs, assets and liabilities identified and allocated to the project.
Frequent reporting, with the frequency often increasing as the project approaches completion.
A layer of simplified reporting, including key performance indicators relevant to whether the project is on or off track. For instance traffic lights on a dashboard.
A process for identifying project related transactions in the main accounting system and allocating or apportioning these to the project accounting system.
Forecasting of costs to complete the project. Key stakeholders are often not only focused on the costs incurred to date, but also those committed and the expected final cost.[2]
Projects differ from the day-to-day business-as-usual (BAU) activities in that they frequently cross organisational boundaries, may last for anything from a few days or weeks to a number of years, during which time budgets may also be revised many times. They may also be one of a number of projects that make up a larger overall project or program.[4]
Consequently, in a project management environment costs (both direct and overhead) and revenues are also allocated to projects, which may be subdivided into a work breakdown structure, and grouped together into project hierarchies. Project accounting permits reporting at any such level that has been defined, and often allows comparison with historical as well as current budgets.[5]
Project accounting is commonly used by government contractors, where the ability to account for costs by contract (and sometimes contract line item, or CLIN) is usually a requirement for interim payments.[5]
Percentage-of-completion is frequently independently assessed by a project manager, program management officer (PMO) and project accountant. It includes the continuous recognition of revenues and income related to longer-term projects. By doing this, the seller is able to identify some gain or loss relevant to a project in every accounting period that is ongoing active. Funding advances and actual-to-budget cost variances are calculated using the project budget adjusted to percent-of-completion.[6][7]
Where labor costs are a significant portion of overall project cost, it is usually necessary for employees to fill out a timesheet in order to generate the data to allocate project costs.[6][8]
The capital budget processes of corporations and governments are chiefly concerned with major investment projects that typically have upfront costs and longer term benefits. Investment go / no-go decisions are largely based on net present value assessments. Project accounting of the costs and benefits can provide crucially important feedback on the quality of these important decisions.[5]
An interesting specialised form of project accounting is production accounting, which tracks the costs of individual movie and television episode film production costs. A movie studio will employ production accounting to track the costs of its many separate projects.[5]
Please mark me brainliest. I beg you
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