Risks and Their Mitigation

Jerry Schaufeld

Chapter Chapter 11 in Commercializing Growth, 2021, pp 93-96 from Springer

Abstract: Abstract Inherent to any business endeavor is an assumption of risks and the responsibility to offer mitigation strategies for them. Professionally written business plans and project proposals have in common a delineation of known risks and defined mitigation plans to confront and overcome them. In addition, there are financial and marketplace risks for which we do not develop specific strategies, but we can offset their potential financial impact with Balance Sheet reserves. Over time, the accuracy of the reserve accounting became important. A reserve for bad debt, for example, can achieve accuracy over time as the nature of the customer base becomes better known. Although this strategy is sound, some argue that companies can use it to “hide” profits. Indeed, the accounting profession and the Internal Revenue Service (IRS) have provided guidelines as to how reserves should be handled.

Date: 2021
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DOI: 10.1007/978-1-4842-7502-3_11

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