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TOPIC: Query Risks and Opportunities

Query Risks and Opportunities 2 years 2 weeks ago #23420

  • Krishna Neeraj Anantha
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Need help for the following.

1) If opportunity occurs, and due to this opportunity project earned money. Where should this earned money to be shown. To be shown as Profit increase/Reduce BAC?.
2) if Identified risk does not occur, what to be done with the contingency reserve. It should be added back to remaining contingency reserve or Reduce from BAC?.

Query Risks and Opportunities 2 years 2 weeks ago #23421

  • Luke H
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Let a qualified PMP answer this, I just wanted to attempt it to see if I understand it correctly myself.

1. If the opportunity risk event occurs and the project makes money, I believe you can add the funds either to the contingency reserve, or you can release it as a profit/margin of the project.

2. If an identified risk does not occur, then you should release the contingency budget for that risk back into the corporate account; it should not be spent.

3. BAC can never be reduced, you can have an EAC that is lower than the BAC. But the BAC remains permanent once cost baselines are approved.
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