Coursework – Cost Value Reconciliation
Cost Value Reconciliation (CVR) seeks to improve cost control by collating and analysing established totals for costs and value to illustrate the margins profitability of on a project. CVR achieves this by requiring the provision of statutory accounts in addition to the Standard Statement of Accounting Practice number 9 (SSAP9) and secondly provision of all information which have direct implications on the management operations on all levels of the company. This second requirement must be detailed enough to establish a baseline for value at the start, value up-to-date and projected value at completion it also be formatted in such a manner as to provide easy comparative analysis between the two forms under examination. This is the reconciliation process which will provide management with a powerful tool for the identification of potential problems and critical elements of the project. a) Their effectiveness in providing information on cost?
The effectiveness of the cost information collected by CVR methodology is entirely dependent on the accuracy and relevancy of the information. CVR as a method is only partially standardised (SSAP9) this makes the success of the interpretation and analysis entirely predicated on the administrative and technical of the personnel involved in collating and presenting the data. The presentation style of data will most likely vary both between personnel and between organisations; this lack of uniformity can adversely affect ability to identify errors or omissions in the data consequently reducing the accessibility and reliability of information. CVR methodology does provide more accurate and thorough information to assist in cost control management than older traditional method but requires considerable technical skill to produce and interpret reports. b) Their effectiveness in monitoring progress of the works Periodic and regular monitoring using the CVR method as the means of project...
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