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Project Risk and Project Quality Management

1. Application: Foreign Exchange Rates
A foreign exchange rate is the rate at which one currency can be exchanged or converted to another. Due to rate fluctuations, foreign exchange rates greatly impact financial reporting for companies operating and trading internationally. Depending on a company's home country, when accounting for foreign exchange rates, the company will follow IASB or FASB requirements. Consider the differences between IASB and FASB requirements for reporting balance sheet and income statement items when using foreign exchange rates. Think about the impact of financial risks that may exist for multinational companies when reporting financial statements that reflect foreign exchange rates. Consider the role that foreign exchange risk plays when reporting and analyzing financial statements.

I will Write a 2- to 3-page paper differentiating between IASB and FASB requirements for reporting balance sheet and income statement items when using foreign exchange rates. Evaluate financial risks that may exist for multinational companies using foreign exchange rates in financial reporting.

2. Final Project: Project Risk and Quality Management Strategy
Risk exists on all projects. The amount of risk and the degree to which individual risks may impact the project varies depending on the profile of your project. Identifying the risks on projects is a creative process that requires both critical thinking and experience in the project environment. Expert judgment in the type of industry or project can also be very valuable for identifying and analyzing project risk.
For this assignment, review the St. Dismas Assisted Living Facility case study on pages 111 and 112 of the Mantel text, as well as Chapter 4, pages 136-144. Then I will, develop a risk strategy for your project. In addition to listing your risk, describe your process for identifying, analyzing, and managing your risks. Then prepare a quality management strategy. Your project risk management strategy must be at least one page, double-spaced, and include:
- A list of the project risks and a description of the process you used to identify, analyze, and manage project risk.

Your project quality management strategy must be at least one page, double-spaced and include:
- A brief statement on how you plan to manage quality for your project
- A brief statement on how you plan to manage project change
- A brief description of at least two tools and/or techniques you plan to use to manage quality and why you chose those tools

Solution Preview

There are differences between IASB and FASB requirements for reporting balance sheet and income statement items when using foreign exchange rates. The requirement for foreign exchange gain or losses on AFS investments reporting is different. In case of FASB the total change in fair value of available for sale debt securities is recorded in other comprehensive income. Further, any component of the overall change in the fair market value that may be associated with foreign exchange gains and losses on available for sale debt security is treated in a manner consistent with remaining overall change in the instrument's fair value. In case of IASB the available for sale debt instruments, the total change in fair value is bifurcated with the portion associated with foreign exchange gains/losses on amortized cost basis separately recognized in the income statement. The remaining portion of the total change in fair value is recognized in the other comprehensive income net of tax effect. The impact is that the treatment of foreign exchange gains and losses on available for sale debt securities, create more income statement volatility under the IFRS.

The FASB allows hedge accounting for foreign currency risk with internal derivates provided some criteria are complied with and thus allows the hedging of foreign currency risk on a net basis by a treasure center. The treasury center enters into derivatives contracts with unrelated third parties that would offset the foreign exchange risk arising from multiple internal derivative contracts. Under the IASB internal derivatives do not qualify for hedge accounting in the consolidated financial statements because they are eliminated during consolidation. Internal ...

Solution Summary

Project risk and quality management are explained in a structured manner in this response. The answer includes references used.

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