Earned Value (EV)
Earned Value (EV) is the measure of work performed expressed in terms of the budget authorized for that work.
Explanation
Earned Value, formerly known as Budgeted Cost of Work Performed (BCWP), represents the value of work actually completed measured against the planned budget. It is the central metric in EVM because it is compared to both PV (for schedule performance) and AC (for cost performance).
EV is calculated by multiplying the percent complete of each activity by its planned budget. For example, if an activity was budgeted at $10,000 and is 60% complete, the EV is $6,000. EV can never exceed the BAC for the project.
EV must be measured consistently using the rules established in the cost management plan. Common measurement methods include the fixed formula (such as 0/100 or 50/50), weighted milestone, and percent complete. The method chosen should be appropriate for the type of work being measured.
Key Points
- •Formerly known as Budgeted Cost of Work Performed (BCWP)
- •Measures completed work in terms of its authorized budget
- •EV = percent complete multiplied by the budget for that work
- •Can never exceed the Budget at Completion (BAC)
Exam Tip
EV answers: What is the budgeted value of the work actually completed? It is always compared to PV for schedule analysis and to AC for cost analysis.
Frequently Asked Questions
Related Topics
Planned Value (PV)
Planned Value (PV) is the authorized budget assigned to scheduled work, representing the value of work planned to be completed by a given point in time.
Actual Cost (AC)
Actual Cost (AC) is the realized cost incurred for the work performed on an activity during a specific time period.
Cost Variance (CV)
Cost Variance (CV) is an EVM metric that measures cost performance as the difference between earned value and actual cost: CV = EV - AC.
Earned Value Management (EVM)
Earned Value Management (EVM) is a methodology that integrates scope, schedule, and cost data to assess project performance and progress objectively.
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