How to interpret earned value indicators, EV, CV, PV. Earned value analysis project management
The earned value system uses data from the work breakdown structure, project network, and schedule. This integrated cost/schedule system provides schedule and cost variance and can be used to forecast the remaining costs for the in-process project. The earned value approach provides the missing links not found in conventional cost-budget systems. At any point in time, a status report can be developed for the project (Gray, E.W.L. C. (2020). Project Management: The Managerial Process (8th ed.). McGraw-Hill Higher Education)
Glossary of Terms
EV Earned value for a task is the budgeted value of the work accomplished. Work accomplished is often measured in terms of percentages (e.g., 25% complete) in which case, EV is simply percent complete times its original budget. [The older acronym for this value was BCWP—budgeted cost of the work performed.]
PV The planned time-phased baseline of the value of the work scheduled. An approved cost estimate of the resources scheduled in a time-phased cumulative baseline [BCWS—budgeted cost of the work scheduled].
AC Actual cost of the work completed. The sum of the costs incurred in accomplishing work [ACWP—actual cost of the work performed].
CV Cost variance is the difference between the earned value and the actual costs for the work completed to date where CV = EV − AC.
SV Schedule variance is the difference between the earned value and the baseline to date where SV = EV − PV.
BAC Budgeted cost at completion. The total budgeted cost of the baseline or project cost accounts.
EAC Estimated cost at completion
ETC Estimated cost to complete remaining work
VAC Cost variance at completion. VAC indicates expected actual over- or underrun cost at completion.
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