Planned Value (PV), Earned Value (EV) & Actual Cost (AC) in Project Cost Management


I have discussed earned value management in my previous blog post in detail and also gave you a short brief of its three elements:

  1. Planned Value (PV)
  2. Actual Cost (AC)
  3. Earned Value (EV)

Now we are going to discuss these elements in detail. From this point onward, you’re going to see mathematical calculations; therefore, I request you go through every step thoroughly. If you miss any step or don’t understand the concept, further calculations will be very difficult for you and you may have problems with understanding more advanced cost management concepts. Therefore, understand the concepts well before proceeding further.

The calculations for finding Planned Value, Earned Value, and Actual Cost are very simple, and once you understand them, the rest will be a piece of cake for you.

Although I’m going to explain them thoroughly, I also suggest you have a good PMP exam reference book for further reading and to practice more questions.

Okay, let’s get started.

Planned Value (PV)

This is the first element of earned value management. Planned Value is the approved value of the work to be completed in a given time, or you can say that it is the money that you should have spent as per the schedule.

As per the PMBOK Guide “Planned Value (PV) is the authorized budget assigned to work to be accomplished for an activity or WBS component.”

You calculate Planned Value before actually doing the work, which also serves as a baseline. Total Planned Value for the project is known as Budget at Completion (BAC).

Planned Value is also referred to as Budgeted Cost of Work Scheduled (BCWS).

Formula for Planned Value (PV)

The formula to calculate Planned Value is very simple. Take the planned percentage of the completed work and multiply it by the project budget and you will get Planned Value.

Planned Value = (Planned % Complete) X (BAC)

Example of Planned Value (PV)

You have a project to be completed in 12 months and the total cost of the project is 100,000 USD. Six months have passed and the schedule says that 50% of the work should be completed.

What is the project’s Planned Value (PV)?

Let’s see what we have been given in this question.

Project duration: 12 months

Project cost (BAC): 100,000 USD

Time elapsed: 6 months

Percent complete: 50% (as per the schedule)

Planned Value is the value of the work that should have been completed so far (as per the schedule).

Therefore, in this case we should have completed 50% of the total work.


Planned Value = 50% of the value of the total work

= 50% of BAC

= 50% of 100,000

= (50/100) X 100,000

= 50,000

Therefore, the project’s Planned Value (PV) is 50,000 USD.

Application of Planned Value (PV)

Planned Value is used to calculate Schedule Variance and Schedule Performance Index.

Actual Cost (AC)

This is the second element of earned value management. Actual Cost is the total cost incurred for the actual work completed to date; or simply put, it is the amount of money you have spent to date.

As per the PMBOK Guide “Actual Cost (AC) is the total cost actually incurred in accomplishing work performed for an activity or WBS component.”

Actual Cost is also known as Actual Cost of Work Performed (ACWP).

Formula for Actual Cost (AC)

Finding Actual Cost is simplest of all.

There is no special formula to calculate Actual Cost. It is an amount that has been spent and you can find it very easily in the question.

Example of Actual Cost (AC)

You have a project to be completed in 12 months and the total cost of the project is 100,000 USD. Six months have passed and 60,000 USD has been spent, but on closer review you find that only 40% of the work has been completed so far.

What is the project’s Actual Cost (AC)?

Actual Cost is the amount of money that you have spent so far.

In the question, you have spent 60,000 USD on the project so far.


The project’s Actual Cost is 60,000 USD.

Application of Actual Cost (AC)

Actual Cost is used to calculate Cost Variance and Cost Performance Index.

Earned Value (EV)

This is the last and third element of earned value management. Earned Value is the value of the work actually completed to date, or you can say that if the project is terminated today, Earned Value will show you the value that the project has produced.

As per the PMBOK Guide “Earned Value (EV) is the value of work performed expressed in terms of the approved budget assigned to that work for an activity or WBS component.”

Although all three elements have their own significance, Earned Value is more respected because it shows you how much value you have earned from the money you have spent to date.

Earned Value is also known as Budgeted Cost of Work Performed (BCWP).

There is a difference between Planned Value and Earned Value. Planned Value shows you how much money you have planned to complete the work in a given time, while Earned Value shows you how much work you have actually completed or earned on the project.

Formula for Earned Value (EV)

The formula to calculate Earned Value is also very simple. Take the actual percentage of the completed work and multiply it by the project budget and you will get the Earned Value.

Earned Value = % of completed work X BAC

Example of Earned Value (EV)

You have a project to be completed in 12 months and the total cost of the project is 100,000 USD. Six months have passed and 60,000 USD has been spent, but on closer review you find that only 40% of the work has been completed so far.

What is the project’s Earned Value (EV)?

In the above question, you can clearly see that only 40% of the work is actually completed, and the definition of Earned Value says that it is the value of the project that has been earned.


Earned Value = 40% of the value of total work

= 40% of BAC

= 40% of 100,000

= 0.4 X 100,000

= 40,000

Therefore, the project’s Earned Value (EV) is 40,000 USD.

Application of Earned Value (EV)

Earned Value is used to calculate Schedule Variance, Cost Variance, Schedule Performance Index, Cost Performance Index, Estimate at Completion, and To Complete Performance Index.

In your PMP exam, you will be given a scenario and asked to identify these three elements. Please note that these elements have also been known by different names, such as: Planned Value as Budgeted Cost of Work Scheduled (BCWS), Actual Cost as Actual Cost of Work Performed (ACWP) and Earned Value as Budgeted Cost of Work Performed (BCWP). It is less likely that you will see these terms in your PMP exam, so therefore concentrate on terms mentioned in the PMBOK Guide rather than these old names.


Earned Value, Planned Value, and Actual Cost are very basic elements of earned value management which give you a basic overview of your project status. Earned Value is the value of the work actually completed to date, Planned Value is the money that you should have spent as per the schedule, and Actual Cost is the amount spent on the project to date. Once you have this information on hand, you can find the current status and compare it with the planned progress.

Here is where this blog post on Earned Value, Planned Value, and Actual Cost comes to an end. Now you can move on to the next blog post on Schedule Variance and Cost Variance which explains if you are ahead of  schedule or behind schedule or whether you are under budget or over budget.

If you are interested in learning all the mathematical formulas for the PMP exam, you can try my PMP Formula Guide. You can also try my PMP Question Bank to practice 400 PMP exam sample questions.

image credit => renjith krishnan / 


  1. Manishi Sarma says

    good, in the simplest form and style, easily understandable. No complicated long solution or words.

  2. Gabriela Garcia R says

    Thank you so much! This was very easy, helpful and awesome explaination!
    In a very comprenhensible text!

  3. Sam Lee says

    For a project, I have Planned Value :1725.02
    Actual Cost is: 1709.02

    Can we figure out Earned Value from this?

    The system yielded 1865.91 which is higer than both numbers. Is this possible?


    • Fahad Usmani says

      No, you can not figure out the earned value from the given data.

      Yes, it is possible to have earned value more than the actual cost and the planned value.

      Hope it helps.

      • Athar Ali Khan says

        Dear Sir,

        Why cant we calsulate EV from the given information????
        I mean, is NOT really possible OR the question require more information…

        BAC’s planned completion is PV
        BACs actual completion is EV
        Money spent so far from BAC is AC…

        So, is there no banlance equation combining ALL four in it…

        Something like PV + EV + AC = BAC???

        • Fahad Usmani says

          Let us say that you have completed the project. Just think that in this case how much you have spend, how much you have earned, and what is your planned value.

          If we go by your formula

          BAC = PV + EV + AC

          BAC = 3 times of BAC (approximately)

          This is so because at the end of your project, planned value will be equal to BAC, and about equal amount has been spent to complete it same amount is earned.

          Therefore your formula is not correct.

  4. V. John says

    Very well explained, simple, straight to the point and with relevant, brief examples. Exactly what students would look for. Thumbs up

  5. jesus says

    Me parace muy bien que nos ayuden a interpretar los conceptos de la guia del PMBOK lo leia y me era complicado enterderlo.Gracias

  6. melissa says

    Wow, I can’t thank you enough. I was staring at my CAPM study guide, and pretty stumped about Rita’s definitions on this one. You saved me!

  7. Adeola says

    An amount of 25,000$ was given to a small project team to produce an application for the duration of 12months. Rate of performance for the project is 20,000$. The budget at completion (BAC) is 120,000$. Please how do i find the cost variance (CV), earned value (EV) and actual cost (AC)?
    Thank you.

    • Fahad Usmani says

      Hello Adeola,

      This question has some contradictory statements. You’re saying that project team has been given a 25,000$ money to produce an application within 12 months. According to this statement, BAC is 25,000$.

      Now again in same question, you are saying that BAC is 120,000$. How is this possible?

      • Adeola says

        Yes it got me confusing. Its actually a question from an assignment given to me.

        The original question is “Amount of 25,000$ (PV) was given to a small project team to produce simple android mobile application for the duration of 12 months. Rate of performance for the project is 20,000$(RP). The budget at completion is 120,000$.”

        I omitted (PV) from the earlier message. Does it make any sense now?

        • Fahad Usmani says

          Sorry Mr. Adeola but it still don’t make sense to me.

          The $25,000 is BAC for the project team, because project team has to complete the product from this amount.

          Now again you are saying that BAC is $120,000. How is it possible?

          • Jacobia O. says


            I hope you do not mind but I wanted to get in touch with you and could not find a way to directly email you. You wrote a very helpful article on this site regarding the three estimating methods and I would like to know if you know of any resources that show actual examples with each method applied.

            I am trying to understand the difference between Parametric estimating and Bottom Up as both seem to provide the same output to me. Please help me to understand if there is any difference.

            I appreciate any help you can provide and thank you for reading my message.

  8. Muhammad Ali says

    Dear Fahad,

    Thanks for the great efforts you did, the material is very easy to digest and useful. you saved our time to understand complex things in a simplest way.

    • Fahad Usmani says

      Thank you Muhammad. I always try to put concepts in simple way so that people can easily digest them.

      Thanks again for appreciating my efforts.

  9. Saad says

    I m still confused that what is the major difference between earned value and actual cost. What i perceived from you article is that earned value is in terms of the work which was performed/achieved at any spontaneous time and it has no concern with the cost involved in it whereas in actual cost the major parameter is the cost. Do correct me if i am wrong

    • Fahad Usmani says

      Let’s say that you have $100 project. At certain point you notice that you have spend $50.

      Therefore this $50 is you Actual Cost (AC).

      Now, on closer review you notice that only 40% of the project is completed. Therefore, Earn Value (EV) will be the 40% of total work; i.e. $40.

      • Athar Ali Khan says

        Thanks Fahad Sb… for a moment Saad got me confused as well… BUT saved my undersading going off tarck..

        Can we say!!! AC is the amount of MONEY you have spent on a project at any pointif time???? BUT “EV” is the % completed by spending that MONEY???

        cause it might be possible that you have spent $80 but the completed work is only 30%

        So 80 becomes teh AC and 30% becmes the EV

        Right Sir??

          • Mujahid says

            in that case, Earned Value is of more significance, which helps you understand your Project’s performance at any point in time. Whereas Actual Cost only gives you the realistic data..

            in simpler terms, EV is how much i should have spent for this work, AC is how much i actually spent.
            Please correct me if iam wrong..!

            Thanks Bro Fahad

  10. Imran Khan says

    Your project has a BAC of $400,000 and is expected to last one year. The project work is scheduled to be completed in equal amounts each month. Currently, the project is in month three, but is only 20% complete. You have spent $35,000 to completed the work. What is the PV for this project?

    • Fahad Usmani says

      Hello Imran, sorry for this late reply. I was thinking that I have already replied.

      Anyway, solution is as follow:

      As the question says, the project work is scheduled to be completed in equal amounts in each month. Therefore, Planned Value to be spent in any single month is 400,000/12 which is $33,333.00

      Now, you’re saying that the project is in third month.

      Therefore, the money spend till the end of third month will be three times the money spend in one month; i.e. 3*33,333.000 which will be $100,000 USD.

      Hope this helps.

      • Athar Ali Khan says

        Sir can we:

        (100% / 12) x 3 = 25%

        PV = 25% of 400,000 => $100,000 USD

        Will it be a right apporach to follow in future???

          • hakkeem says

            one year project
            ev= 100000
            ac= 150000
            bac= 900000

            Q1. how long the project doing?
            Q2. use the CPI to calculate the EAC?
            Q3. use the SPi to estimate how long it will take to finish this project?

            could you help me to find answer?

  11. Rio R says

    Thank you very much, Fahad…
    This is definitely the simplest and clearest way to explain PV, EV, and AC.
    Very very helpful article.. :)

  12. Pavan says

    Very nice way of explaining the concepts. Anyone can clearly understands the concepts with the examples provided. This is a very useful article. Thank you!!
    Pavan S

  13. Neha says

    thanks Fahad… i am a complete fresher just joined an organization. I saw these words in measurement and metrics analyses… When i googled it out, found your explaination most simplest one….. Thanks a lot!

  14. Sanjay Kumar says

    Hello Fahad..

    Can we apply the PV and EV concepts on FP projects using Fixed Milestone Billing (FMB) ?
    If yes, then could you please let me know how this would need to be calculated?

    • Fahad Usmani says

      Earn Value concepts provide you status of project and Fixed Milestone billing is way of making payment.

      It is up to you that how you plan to make payment. You may make payment on monthly basis based on status report or based on some other parameters….

  15. Sesha says

    Dear Fahad,

    Your Examples on PV, EV & AC and very clear.
    I was struggling to know whats the difference between EV & AV, now you made me clear..
    thank you very much for the detailed explanation.


    • Fahad Usmani says

      This was the first article of series of few posts in cost management. I suggest you read all articles in this series to gain understanding of cost management concepts; e.g. SPI, CPI, EAC, ETC, TCPI, etc.


  16. peggy says

    Can you help me to understand how the “0.375” in the answer was calculated.

    You are a project manager who is in charge of an important project for your company. The project is 40% complete after 3 months and has cost $350,000. The budget for the project is $950,000 and is scheduled to last 8 months. How is the project performing?
    The project is ahead of schedule and under budget

    CPI=EV/AC CPI=(950,00*40%)/350,000 CPI=380,000/350,000 CPI=1.09(under budget); SPI=EV/PV SPI=380,000/(950,00 x 0.375) SPI=380,000/36,250 SPI=1.07 (ahead of schedule

    • Fahad Usmani says

      Hello Peggy,

      Let us calculate the Planned Value from the given question:

      Question says that the total budget is 950,000 USD, and the duration is 8 months.

      It means, you have to spend 950,000 USD in 8 months,

      Therefore, money to be spend in one month = 950,000*1/8
      and, money spend in three months = (950,000*1/8)*3
      = 950,000*3/8
      =356,250 USD

      Hope this helps.

  17. Andy Furman says

    Need to answer this questions

    1. What is the actual cost to date? Is the project over or under budget?
    2. What is the SV for the project? Is the project ahead of or behind schedule?
    3. Calculate CPI and SPI.
    4. Assume a typical variance and calculate ETC and EAC.
    5. Assume an atypical variance and calculate ETC and EAC.

    Assume that A project has earned value of planned value of $628,000 and earned value of $590,000 and that you have calculated a CV of ($50,000).

  18. Michael says

    Thank you for your very good explanation.

    Question: When we are talking about percentage of completion are we talking with regards to output, expenditure or time?

    For example, if my project is to make 100 cars in one year, but i buy all my materials upfront and this accounts for half my expenditure, then when is the project 50% complete? Is it:
    1) After ive made 50 cars
    2) After half a year
    3) After the first month when ive spent 50% of my planned budget

    Thank you.

    • Fahad Usmani says

      We are talking about the Values. For example, Earned Value, Actual Cost and Planned Value.

      Producing cars is an example of operation.

      Anyway I understand what you want to ask…

      You will always measure your performance against approved plan. If your plan says that you should have done these things to date, and you do not able to do so, you’re in bad shape.

      • Michael says

        Thank you for your reply, im just trying to establish that where you have put ‘Percent complete – 50% (as per the schedule)’ how i can tell im 50% of the way through my project.
        Yes i agree if your plan is saying you should have completed more by a certain date then your behind schedule but that dosen’t tell you your percentage completion, just that your not where you planned to be.
        I’m sure it differs between projects but my question is whats the generic way of dividing up your project into 20%, 30%, 50%, before the project has begun…is it time related?

        Again thank you

  19. iSayed says

    I still don’t understand the difference between PV and EV. Isn’t EV the same as AC – i.e. the actual amount of work that has been done? The definition of EV is very vague in the PMBOK as well as everywhere on the internet.

    • Fahad Usmani says

      Difference between these terms is very clear.

      Earned Value is the value of the completed work. Let us say that by this time you have completed 10% of the project and total worth of the project is 100,000 USD. In this case the Earned Value will be 10,000 USD.

      However, you notice that, to complete this much of work you have spend 15,000 USD. This is your Actual Cost.

      Again when you see your schedule, which says that by time you should have completed 13% of the work. This means that your Planned Value is 13,000 USD.

      Hope it helps.

  20. Manish Katole says

    Dear Sir,

    Could you please explain the ways to get the ‘planned percent complete’ and ‘percent of work completed’.

    Thanks and Regards,

    • Fahad Usmani says

      Usually these information are given in the question itself. Otherwise you can get it with either variance formulas or the performance index formulas.

  21. Tony says

    Hi, thanks for helping out in this forum. I do understand EV from theoretical discussions but in practical terms have some few questions. Now, for a contractor working on a project for a client. The contractor has a budget given by the client which is the PV, in respect to actual cost am a bit confused. Will the AC be the cost (internal cost) to the contractor or to the client, knowing that the contractor makes a margin from the client based on rate to client minus internal rate.

    Any help on this?

      • Tony says

        Thanks Fahad. You are correct I should have stated this is BAC and not PV which is time phased baseline. However, I am still concerned about the actual cost as described in my previous post. Can you please enlighten me on that.

        So from my previous post it means EV can be different from client and contractor? Also, if the project goes to plan, it means also AC=EV?

        Kindly let me know if I am correct.

  22. Biliamin says

    Hi Farad, I am highly impressed with all you posts… It seems you just handpicked all the areas I had issues with…

  23. Gina says

    How do I calculate the PV, EV and AC for an activity tha finished 2 weeks behind schedule with a cost of $100,000. It was to have a cost of $110,000.

  24. sumit says

    Can you please tell me how we can work out in this question ??
    An activity on the critical path of a project was scheduled to be completed within 16 weeks, with a budget of £8000. During a performance review, which took place 8 weeks after the activity was initiated, it was found that 60% of the work had already been completed and that the actual cost was £6000.
    (a) Calculate the Earned Value (EV) of the activity.
    (b) Calculate the Cost Performance Index (CPI) and the Schedule
    Performance Index (SPI) for the activity.
    (c) Based on the performance so far, provide an estimate for the expected budget at completion.
    (d) The management argues that the expected budget at completion could stay at £8000. Discuss the assumptions behind this argument.

    • Fahad Usmani says

      Budget at Completion (BAC) is £8,000

      Earned Value (EV) = 60% of 8,000 = £4,800

      Actual Cost (AC) = £6,000

      Planned Value (PV) = 50% of £8,000 = £4,000 (Since 50% of time has passed, so let us assume that 50% of work should be completed).

      I hope now you can calculate the rest of things…

  25. Lyra says

    Your blog is so helpful! You really broke concepts down in a very simple way! I’m not a math person, so formulas don’t quickly make sense to me. But conceptual explanations do! The examples you give and what definitions mean in a practical sense are great ways of breaking it down! Good Job! Please keep writing! Thanks!

  26. Nikhil Jain says

    Hi Fahad


    I am preparing for my PMP examinations I need more practise on such sums\calculations. Please help me out with the same which websiteshould I visit. I have tried a lot but failed.


  27. nandi tom says

    Please assist in this case:
    Which formula would be appropriate?

    You are working on a new short course project. The allocated budget for the project is R500,000; however, it has come to your attention that the initial cost estimation was flawed. There are four broad phases in this project:
    • Complete written module content: R125,000
    • Film module videos: R150,000
    • Initiate marketing campaign: R75,000
    • Confirm external guest lecturers: R50,000
    The cost estimate for each project phase has been calculated based on the estimated costs for all the sub-activities that fall under each phase. You need to re-estimate the total project cost in order to determine an accurate budget.

    • nandi tom says

      Hi Fahad,
      I sorry I am so rude didn’t even greet. I am in south Africa currently doing a Project management course and am completely new to the program so I am struggling a little. I have been following your blog and it has been helping me make scene of so much.

  28. balaji ramulu says

    hi all, i’m new to this post and i found the conversation and calcualtion was very detail and simple. im doing my pmp prep and i want someone to help me out on the below actual project scenario to find out PV and EV.,

    project duration – 4months authority approval + 8 months construction = 12months total
    project total cost = 13,500,000 (BAC)
    at the end of 75th day, i’ve obtained 5 authority approvals out of 7 and ongoing.
    i paid so far = 12,000 (AC)
    advance payment = 20 % of BAC, not paid.

    i got confused while calcualting the PV and EV, as i’ve only so much details as per the current project situation.

    help me out in find out the PV, EV


  29. lina says

    Hi Fahad;
    I would like to thank you for the extra help that your blog gave me, to pass my PMP exam on the first attempt.
    You do an amazing job, keep doing!!

  30. Teressa says

    You are working as an intern and have 10 Servers to upgrade. It is estimated that it will take you 5 hours per Server and you are scheduled to work 5 hours a day. You are paid $10 per hour. After 6 work days you have spent 15 hours and completed 5 Servers.

    Calculate the following:


    I came up with $500 for the BAC, but I cannot calculate the PV.

  31. Nouman Zia says

    below is data for PV/BCWS and % of completed work. Could you please tell me what would be the cumulative EV until 7 weeks. I’m waiting for your reply. Thanks a bunch

    System planning 3,520( week1) 4,800(week2) 8,000(week3) 5,000(w4)

    User interface planning 1,000(w4) 3,040(w5) 2,000(w6) 1,000(w7) 3,000(w8) 1,340(w9)

    System planning 10%(w1) 30%(w2) 70%(w3) 90%(w4) 100%(w5) 100%(w6) 100%(w7)
    User interface planning 10%(w4) 30%(w5) 65%(w6) 80%(w7)

  32. Deepak says


    Can you please let me know why project schedule is input for determine budget process. It is planning process so why we are not using schedule baseline as input.

    Deepak Banga

  33. Hemang says

    Need your help in understanding the planned value (PV) with the example :
    a. Project started in Oct 2014;
    b. Project will be completed in 28 months from Oct 2014;
    c. Below was the month on month Budget value, Earned Value and Actual cost;
    Particulars Oct 2014 Nov 2014 Dec 2014 Jan 2015 Feb 2015 Mar 2015 April 2015 Total
    Budget (BAC) 3450 3000 3200 3000 3500 3400 3500 26550
    Earned Value (EV) 3450 2800 3000 2800 3200 3200 3400 21850
    Actual Cost (AC) 3450 0 3000 2500 3000 2000 1000 14950

    With your above practical example in this article, it seems that PV = EV for the period already passed.

    Please advice.

    Thanks & Regards,
    Hemang Shah

    • Mujahid says

      BAC = 23050(upto Apr’15) + 26550 = 49600

      Duration complete is 7 months out of 28 months = 25%

      PV = 25% of BAC
      i.e., PV = (25/100) * 49600
      therefore, PV = 12400
      EV = 21850
      AC = 14950

      is this correct..???

  34. Tauseef Qureshey says

    In order to find Future Value which formula is correct to calculate from PMP point of view

    1. FV=PV(1+r)n where n is the power of (1+r) and PV is Present value, r is rate of interest & n is time period i.e number of years

    2. FV=PV(1+r/100)n where n is the power of (1+r/100)

    3. FV=CF [1-1/(1+r)n]/r + CF[1/(1+r)n] where n is the power of (1+r) , CF is the cash flow

  35. Mujahid says

    Hi Fahad
    Thank you very much for your efforts if breaking down complicated topics into simpler forms. You can’t imagine what it feels like for a beginner like me.
    I have just started to prepare myself for PMP.
    Thanks once again..


  36. Aalok says

    Hi Fahad,
    I am working on actual project in which I am using MPP 2010. I have created Task with their Start and End date, Budgeted Cost as well as Baseline. Now when I am going on EVM from Table option, MPP list all the Colum of EVM. In that I can able to see values in AC,CV,EAC and VAC. but PV,EV,SV and BAC are coming $0 for each task. Can you tell me why MPP is reflecting $0 for above?


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