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Project Financial Management

Course developers

Course abstract

Students acquire accounting organization related to project management, accounting principles, methods and legal basis of accounting objects, acquire in-depth knowledge, skills and abilities in project budget planning, preparation, implementation and control methods and techniques. Students acquire the skills to identify and evaluate project financial risks, principles of selection of funding sources, project cash flow and financing plan development, in accordance with the project life cycle model.

Learning outcomes and their assessment

1. Knows and understands the accounting principles, methods and legal basis of accounting objects related to project management. Test (tasks with calculations), exam.
2. Knows and understands the basic principles of project budget planning and preparation, knows the methods and their application in project management, according to the project life cycle. Test (tasks with calculations), exam.
3. Knows and understands the mechanisms of project financial (cash) flow preparation, control and progress evaluation. Test (tasks with calculations), exam.
4. Is able to calculate the value of accounting objects and use financial statement information. Test (tasks with calculations), exam.
5. Is able to to plan and develop a project budget. Test (tasks with calculations), exam.
6. Is able to plan and evaluate the project financial (cash) flow and the impact of financial risks. Test (tasks with calculations), exam.
7. Able to plan tasks responsibly. Exam.
8. Able to select information and present calculations, proposals. Exam.
9. Ability to apply the acquired knowledge to understand and analyse accounting and financial information, to work successfully with project budget planning and development, using modern financial management methods. Practical works, tests, exam.
10. Able to apply knowledge and practical skills in accordance with the scope of the project, the organization accounting policy, taking into account financial risks and uncertainties. Practical works, tests, exam.

Course Content(Calendar)

1. Accounting organization in project management. The role, requirements and basic principles of accounting. Objects of accounting: funds, sources of financing, income and expenses. Balance. Accounting accounts. (lecture 1 hour, practical work 1 hour)
2. Accounting for long-term investments and calculation of costs. Intangible assets. Development costs. Goodwill. Fixed assets. Depreciation of fixed assets. Recognition of long - term investments in the financial statements. (lecture 1 hour, practical work 1 hour)
3. Accounting for current assets and calculation of costs. Savings. Debtors. Payments of the next period. Short - term financial investments. Funds. Cash flow planning. (lecture 1 hour, practical work 1 hour)
4. Accounting for equity and credit liabilities. Share capital. Reserves. Profit or loss accounting. Long - term and short - term creditors. Deferred income. Accrued liabilities. (lecture 1 hour, practical work 1 hour)
5. Revenue and expense accounting. Recognition of project revenue. Project cost classification. Labor costs. Calculation and accounting of value added tax (VAT). (lecture 1 hour, practical work 1 hour)
6. Financial statements. Content and preparation of financial statements. (lecture 1 hour, test 1 hour) 7. Project budget, its types and preparation methods. Identification of project financial requirements and resources. Project budget, its elements and preparation methods. Basic principles of project budget development, budget constraints and their evaluation. The need for effective project budgeting. (lectures 2 hours, practical work 2 hours)
8. Project budget planning and management. Project budget planning process and its management, planning methods. Determining project costs, resource evaluation. Project budget control and monitoring. Evaluation of project budget implementation progress. Benefits of costs and revenues, analysis of project budget changes and their impact on the project progress, monitoring of actual expenses and revenues against budget and cash flow forecasts. (lectures 2 hours, practical work 2 hours)
9. Project financial flow, its preparation and control. Project cash flow, cost determination methods. Preparation of project cash flow forecast, according to the project life cycle. Project cash flow analysis and control. (lectures 2 hours, practical work 1 hour, test 1 hour)

Requirements for awarding credit points

1. Accounting object accounting principles, methods and legal basis, financial report, cash flow planning. Practical work, 1st test (tasks with calculations) (30%)
2. Development of project budget and financial flow, analysis of financial flow progress, cost-benefit analysis, monitoring of actual expenses and revenue. Practical work, 2nd test (tasks with calculations) (30%)
3. All the topics. Exam (40%)

Description of the organization and tasks of students’ independent work

Preparation for practical work, tests, exam.

Criteria for Evaluating Learning Outcomes

All work must be completed. Each work is evaluated with a mark. The evaluation of the study course depends on the evaluation of 2 tests (60%), the evaluation of the exam (40%). 10% corresponds to one point on the 10-point assessment scale.

Compulsory reading

1. Brooks R.M. Financial management: core concepts, Pearson. 2016. 648 p.
2. Kerzner H. Project Management (12th ed.). A Systems Approach to Planning, Scheduling, and Controlling. 2017. 816 p.
3. Leibus I., Pētersone I., Jesemčika A., Svarinska A., Grigorjeva R. Finanšu grāmatvedība. Rīga: Lietišķās informācijas dienests, 2020. 318 lpp.

Further reading

1. Brigham E.F., Ehrhardt M.C. Financial Management, Theory and Practice, 2010. 1184 p.
2. Džouns R. Projektu vadības pamati. Lietišķās informācijas dienests, 2008. 223 lpp.
3. Finnerty John D. Project Financing: Asset-Based Financial Engineering. Third ed., Wiley, 2013. 543 p. Pieejams: http://books.google.com
4. Gatti S. Project Finance in Theory and Practice: Designing, Structuring, and Financing Private and Public Projects. Elsiever, 2013. 464 p. Pieejams: http://books.google.com
5. Gupta Ambrish. Project Appraisal and Financing. (ch. No 5-6) 2017. Pieejams: http://books.google.com
6. Kozlovs V. Investīciju projektu ekonomiskais novērtējums. Rīga: 2005.- 139 lpp.
7. Leibus I., Grigorjeva R., Jesemčika A., Svarinska A. Grāmatvedības pamati uzņēmumos. Rīga: Lietišķās informācijas dienests, 2019. 195 lpp.
8. Sharpe W.S., G.J.Alexander, J.V.Bailey. Investments. 5th ed. M.Infra-M, 2009. 1028 p.
9. Saksonova S. Finanšu informācijas un pārskatu praktiskā izmantošana uzņēmumu finanšu lēmumu pieņemšanā. Rīga: I.K. “INFO TILTS”, 2012. 313 lpp.
10. Yescombe E.R. Principles of Project Finance. Second ed. Wiley, 2013. 559 p. Pieejams: http://books.google.com
11. Vinter G., Price G. Project Finance: a Legal Gide, Sweet&Maxwell Limited, 2006. - p. 473 http://books.google.com

Periodicals and other sources

1. Attīstības finanšu aģentūra „Altum”. Pieejams: http://www.altum.lv
2. ES Struktūrfondi. Pieejams: http://www.esfondi.lv
3. Finanšu ministrija. Pieejams: http://www.fm.gov.lv
4. International Journal of Managerial Finance. Pieejams: International Journal of Managerial Finance | Emerald Insight
5. Journal of Corporate Finance. Pieejams: Journal of Corporate Finance - Journal - Elsevier
6. Journal of Financial Stability. Pieejams: Journal of Financial Stability / ScienceDirect.com by Elsevier
7. Latvijas Investīciju un attīstības aģentūra. Pieejams: www.liaa.lv
8. Latvijas pašvaldību savienība. Pieejams: http://www.lps.lv
9. Lauku atbalsta dienests. Pieejams: www.lad.gov.lv
10. LR Ekonomikas ministrija. Pieejams: www.em.gov.lv
11. Project management Jorunal. Pieejams: pmi.org
12. Riska vadības rokasgrāmata. Lietišķās informācijas dienests. Rīga.
13. The Journal of Risk Finance. Pieejams: Journal of Risk Finance | Emerald Insight

Notes

Compulsory course of study for full-time professional master’s degree programme “Project Management”