EVP — AACE Earned Value Professional Cheat Sheet
Cheat sheet: earned value formula, baseline, forecasting, variance, and control reference for AACE International AACE Earned Value Professional (EVP) candidates.
Use the tables for a quick pre-exam check. Expand a topic’s notes for explanations, examples, and additional distinctions.
Scope and study context
The exam-prep challenge is not just memorizing formulas. You need to recognize what the numbers mean, choose the right forecast method, identify weak baseline discipline, and separate schedule, cost, scope, and accounting issues.
Exam-Focused Use
This Cheat Sheet supports independent review for the AACE International AACE Earned Value Professional (EVP) exam, code EVP. Use it to rehearse earned value terminology, formulas, baseline logic, forecasting assumptions, and common decision points.
For calculation questions, write down BAC, PV, EV, AC, EAC, ETC, and status date first. Most traps come from mixing budget, actual cost, calendar schedule, and authorized baseline concepts.
Earned Value Core Terms
| Term | Also seen as | Meaning | Exam trap |
|---|---|---|---|
| BAC | Budget at Completion | Total budget for the measured work scope | Usually excludes management reserve unless reserve has been allocated into the baseline |
| PV | BCWS | Budgeted value of work scheduled by the status date | Planned value is not actual spending |
| EV | BCWP | Budgeted value of work actually accomplished | EV is earned by progress, not by paying invoices |
| AC | ACWP | Actual cost incurred for the work performed | Should include accruals/recognized costs, not just cash paid |
| CV | Cost Variance | EV - AC | Negative means over cost; positive means under cost |
| SV | Schedule Variance | EV - PV | Expressed in budget units, not days |
| CPI | Cost Performance Index | EV / AC | Below 1.0 means cost efficiency is worse than planned |
| SPI | Schedule Performance Index | EV / PV | Can become less useful late in the project because SV trends to zero at completion |
| EAC | Estimate at Completion | Current forecast of final cost | Formula depends on the performance assumption |
| ETC | Estimate to Complete | Forecast cost of remaining work | ETC = EAC - AC |
| VAC | Variance at Completion | BAC - EAC | Negative means projected overrun |
| TCPI | To-Complete Performance Index | Required future efficiency | Compare TCPI to historical CPI for realism |
| PMB | Performance Measurement Baseline | Time-phased budget plan for authorized work | Excludes management reserve |
| MR | Management Reserve | Budget reserve for in-scope unknowns | Not for poor performance or out-of-scope work |
| UB | Undistributed Budget | Authorized budget not yet distributed to control accounts | Temporary; should not become hidden reserve |
| CBB | Contract Budget Base | Authorized budget base for the contract work | CBB = PMB + MR in common EVM usage |
| TAB | Total Allocated Budget | Total budget allocated to work | May exceed CBB after a formal over-target baseline |
| CA | Control Account | Management control point at WBS/OBS intersection | Has scope, schedule, budget, responsible manager |
| CAM | Control Account Manager | Person accountable for control account performance | Must explain variance, forecast, and corrective action |
| WP | Work Package | Near-term, detailed, planned work | Should have objective earning method |
| PP | Planning Package | Future work not yet detailed into work packages | Must be refined before execution |
| LOE | Level of Effort | Support activity measured by time passage | Earns EV as planned; masks schedule variance |
| Apportioned Effort | AE | Work tied proportionally to another discrete task | Its EV depends on the base effort |
| OTB | Over-Target Baseline | Formal baseline above contract budget base | Not a routine variance fix |
| OTS | Over-Target Schedule | Formal schedule baseline beyond contractual/specified schedule | Requires disciplined explanation and control |
Essential Formula Sheet
Variance formulas:
\[ \text{CV} = \text{EV} - \text{AC}, \qquad \text{SV} = \text{EV} - \text{PV} \]Index formulas:
\[ \text{CPI} = \frac{\text{EV}}{\text{AC}}, \qquad \text{SPI} = \frac{\text{EV}}{\text{PV}} \]Completion formulas:
\[ \text{ETC} = \text{EAC} - \text{AC}, \qquad \text{VAC} = \text{BAC} - \text{EAC} \]Progress formulas:
\[ \%\text{Complete} = \frac{\text{EV}}{\text{BAC}}, \qquad \%\text{Spent} = \frac{\text{AC}}{\text{BAC}}, \qquad \%\text{Planned} = \frac{\text{PV}}{\text{BAC}} \]To-complete performance:
\[ \text{TCPI}_{BAC} = \frac{\text{BAC} - \text{EV}}{\text{BAC} - \text{AC}}, \qquad \text{TCPI}_{EAC} = \frac{\text{BAC} - \text{EV}}{\text{EAC} - \text{AC}} \]Earned schedule, when used:
\[ \text{SV(t)} = \text{ES} - \text{AT}, \qquad \text{SPI(t)} = \frac{\text{ES}}{\text{AT}} \]Where ES is earned schedule time from the PV curve and AT is actual elapsed time at the status date.
Formula Selection Table
| Need | Formula | Interpretation |
|---|---|---|
| Cost variance | CV = EV - AC | Negative: over cost for work accomplished |
| Schedule variance | SV = EV - PV | Negative: less work earned than planned |
| Cost efficiency | CPI = EV / AC | 0.80 means earning 0.80 budget units per actual cost unit |
| Schedule efficiency | SPI = EV / PV | 0.90 means earning 90% of planned budgeted work rate |
| Forecast if future work follows plan | EAC = AC + (BAC - EV) | Past variance is treated as non-recurring |
| Forecast if current cost efficiency continues | EAC = AC + (BAC - EV) / CPI | Common when cost performance trend is expected to persist |
| Simplified CPI forecast | EAC = BAC / CPI | Algebraically similar when CPI applies to total BAC |
| Forecast with cost and schedule pressure | EAC = AC + (BAC - EV) / (CPI x SPI) | Use only when schedule inefficiency is expected to affect cost |
| Bottom-up forecast | EAC = AC + bottom-up ETC | Best when remaining work has been re-estimated |
| Final variance forecast | VAC = BAC - EAC | Negative VAC means overrun expected |
| Required efficiency to meet BAC | TCPI = (BAC - EV) / (BAC - AC) | If much higher than CPI, BAC may be unrealistic |
| Required efficiency to meet EAC | TCPI = (BAC - EV) / (EAC - AC) | Tests whether the new EAC is credible |
Notes and examples
Key formulas
Memorize the formulas, but also know when each one is meaningful.
\[ \begin{aligned} CV &= EV - AC \\ SV &= EV - PV \\ CPI &= \frac{EV}{AC} \\ SPI &= \frac{EV}{PV} \end{aligned} \]\[ \begin{aligned} VAC &= BAC - EAC \\ ETC &= EAC - AC \\ TCPI_{BAC} &= \frac{BAC - EV}{BAC - AC} \\ TCPI_{EAC} &= \frac{BAC - EV}{EAC - AC} \end{aligned} \]Fast Interpretation Rules
| Result | Meaning | Likely management focus |
|---|---|---|
| CV < 0 | Over budget for work performed | Cost root cause, productivity, rates, rework, procurement costs |
| CV > 0 | Under budget for work performed | Confirm real efficiency, not delayed invoices or missing accruals |
| SV < 0 | Behind planned value | Schedule logic, critical path, resources, constraints |
| SV > 0 | Ahead of planned value | Confirm work sequence and quality, not premature EV credit |
| CPI < 1.0 | Cost efficiency unfavorable | Forecast EAC impact; identify corrective action |
| CPI > 1.0 | Cost efficiency favorable | Validate actuals and scope completeness |
| SPI < 1.0 | Schedule efficiency unfavorable | Use IMS/critical path, not SPI alone |
| SPI > 1.0 | Schedule efficiency favorable | Check whether high-value noncritical work is distorting schedule view |
| TCPI greater than CPI | Future must be more efficient than past | Ask whether corrective action supports it |
| TCPI far greater than 1.0 | Aggressive recovery needed | BAC or EAC may be unrealistic |
| SV = 0 at completion | Normal arithmetic result | Does not prove the project finished on time |
| EV = PV for LOE | Expected for level-of-effort work | LOE can hide schedule problems |
Mini Calculation Example
Given:
| Item | Value |
|---|---|
| BAC | 1,000 |
| PV | 500 |
| EV | 450 |
| AC | 600 |
| Metric | Calculation | Result | Meaning |
|---|---|---|---|
| CV | 450 - 600 | -150 | Over cost |
| SV | 450 - 500 | -50 | Behind planned value |
| CPI | 450 / 600 | 0.75 | Poor cost efficiency |
| SPI | 450 / 500 | 0.90 | Behind planned rate |
| EAC using CPI | 1,000 / 0.75 | 1,333 | Forecast overrun |
| VAC | 1,000 - 1,333 | -333 | Negative completion variance |
| TCPI to BAC | (1,000 - 450) / (1,000 - 600) | 1.375 | Must perform far better than current CPI |
Exam reasoning: the project is both over cost and behind schedule. A rebaseline is not the first answer; first validate data, analyze root cause, forecast, and plan corrective action.
Notes and examples
Quick calculation review example
Assume:
- BAC = 1,000
- PV = 500
- EV = 400
- AC = 450
Then:
| Metric | Calculation | Result | Meaning |
|---|---|---|---|
| CV | 400 - 450 | -50 | Cost overrun for work performed |
| SV | 400 - 500 | -100 | Behind planned value |
| CPI | 400 / 450 | 0.89 | Earning less than one budget unit per cost unit |
| SPI | 400 / 500 | 0.80 | Earning value slower than planned |
| EAC using CPI | 1,000 / 0.89 | About 1,124 | Forecast overrun if cost efficiency continues |
| VAC | 1,000 - 1,124 | About -124 | Expected overrun |
Interpretation: the project is both cost-unfavorable and schedule-unfavorable. A recovery claim should be supported by corrective actions, schedule logic, and a realistic TCPI.
Baseline Structure
| Layer | Purpose | Key control point |
|---|---|---|
| Contract or authorized project scope | Defines the work to be managed | Scope must be traceable to WBS |
| WBS | Product/project scope decomposition | Every control account should map to WBS elements |
| OBS | Organization responsibility structure | Identifies who performs/manages the work |
| RAM | Responsibility assignment matrix | Connects WBS scope to responsible organization |
| Control account | Primary EVM management point | Integrates scope, schedule, budget, actuals, and responsibility |
| Work package | Detailed executable work | Objective EV method selected before work starts |
| Planning package | Future work not yet detailed | Must be converted to work packages before execution |
| PMB | Time-phased budget baseline | Measures performance; excludes MR |
| MR | Management-controlled reserve | Used for in-scope unknowns, not baseline padding |
| CBB | Authorized budget base | Commonly PMB + MR |
| TAB | Allocated budget total | May differ from CBB after formal OTB |
Notes and examples
Baseline Integrity Checklist
A defensible performance measurement baseline should have:
- Authorized scope tied to the WBS.
- Defined responsible organization and CAM.
- Time-phased budget aligned to the integrated schedule.
- Objective earning methods for discrete work.
- Work authorization before work begins.
- Clear separation of distributed budget, undistributed budget, and management reserve.
- Change control for scope, schedule, and budget changes.
- Traceability from baseline to actual costs and performance reports.
- Variance thresholds and documented analysis expectations.
- Forecasting discipline, not just historical reporting.
Control Account Reference
| Element | What it should contain | EVP exam emphasis |
|---|---|---|
| Scope | Specific authorized work | Avoid ambiguous or duplicated scope |
| Schedule | Activities, logic, milestones, status date | EV must align with schedule status |
| Budget | Time-phased resources/cost | Budget is not a spending plan alone |
| EV method | How value is earned | Must be objective and appropriate |
| Actual cost collection | Cost account mapping and accrual rules | AC must match the work scope being measured |
| CAM accountability | Variance analysis and forecast | CAM explains root cause, impact, and action |
| Risk linkage | Known threats/opportunities | EAC should reflect risk exposure |
| Change history | Approved baseline revisions | Prevents unauthorized baseline movement |
Earned Value Measurement Methods
| Method | How EV is earned | Best for | Common trap |
|---|---|---|---|
| 0/100 | 0% until complete, then 100% | Short tasks with clear completion | Too harsh for long-duration work |
| 50/50 | 50% at start, 50% at finish | Short tasks with start/finish evidence | Overstates progress when many tasks are merely started |
| Weighted milestones | Predefined value at milestone completion | Engineering, procurement, deliverable-based work | Milestones must be objective and weighted before work starts |
| Percent complete | EV based on assessed progress | Longer work where physical progress can be measured | Subjective if not backed by measurable criteria |
| Physical measurement | EV from installed quantities or measured output | Construction, manufacturing, field work | Requires reliable quantity tracking |
| Units complete | EV per completed unit | Repetitive production | Unit budget must reflect real effort/cost pattern |
| Apportioned effort | EV tied to a related discrete work base | Inspection or support proportional to production | Bad if base activity is not genuinely related |
| Level of effort | EV equals planned passage of time | Management/support activities | Produces no schedule variance by design |
| Fixed formula | Preset split such as 25/75 or 50/50 | Low-value, short-duration tasks | Can distort status if task durations are too long |
Notes and examples
Choosing the EV Method
| Situation | Prefer | Avoid |
|---|---|---|
| Tangible deliverables with objective events | Weighted milestones | Subjective percent complete |
| Repetitive measurable quantities | Units complete or physical measurement | LOE |
| Long engineering package with interim deliverables | Weighted milestones | 0/100 if it hides progress too long |
| Short procurement action | 0/100 or 50/50 | Detailed percent complete |
| Ongoing project management support | LOE | Treating LOE as discrete deliverable progress |
| Quality inspection proportional to production | Apportioned effort | Standalone subjective progress |
| High-risk work package | Objective milestones with evidence | Formula earning that front-loads EV |
Progress measurement methods
Know which earned value technique fits the type of work.
| Technique | Best for | How value is earned | Common trap |
|---|---|---|---|
| 0/100 | Short tasks with clear completion | 0% until complete, then 100% | Can delay EV recognition |
| 50/50 | Short tasks started and completed within limited periods | 50% at start, 50% at finish | Can overstate progress if tasks linger |
| Weighted milestone | Discrete work with measurable interim points | EV earned at predefined milestones | Milestones must represent real progress |
| Percent complete | Work where physical progress can be estimated reliably | EV based on assessed completion | Subjective if no objective basis |
| Units complete | Repetitive measurable output | EV based on completed units | Unit weighting must reflect actual budget |
| Physical measurement | Engineering, construction, fabrication, installation | EV based on measurable installed/verified quantities | Quantity progress may not equal total effort |
| Level of effort | Support or sustaining work | EV usually follows passage of time | Does not reveal true performance efficiency |
| Apportioned effort | Work tied to another discrete effort | EV derived from base activity progress | Bad if the relationship is weak |
High-yield trap: LOE can hide performance problems. Because EV often tracks time, LOE may show little or no schedule variance even if support effectiveness is poor.
Performance Analysis Workflow
flowchart LR
A[Authorize scope and baseline] --> B[Status schedule and progress]
B --> C[Collect actual costs]
C --> D[Calculate PV, EV, AC]
D --> E[Compute variances and indices]
E --> F[Validate data quality]
F --> G[Analyze root cause]
G --> H[Update EAC and risk view]
H --> I[Define corrective action]
I --> J[Report and control changes]
J --> B
Variance Analysis Quality
| Weak variance explanation | Strong variance explanation |
|---|---|
| “Overrun due to labor.” | “CPI unfavorable due to 20% higher labor hours from rework on drawing package X; corrective action is design review checklist and senior review before release.” |
| “Behind schedule; will monitor.” | “SPI unfavorable because supplier test fixture delivery missed baseline date; recovery requires alternate fixture approval by date X.” |
| “Costs are high.” | “Actual material unit price exceeded baseline assumption; EAC updated using current vendor quote and procurement strategy revised.” |
| “Variance is timing.” | “AC includes early material receipt while EV will be earned at installation next period; no EAC impact if installation occurs as planned.” |
| “Need more budget.” | “Remaining work re-estimated bottom-up; current TCPI to BAC is unrealistic compared with demonstrated CPI; EAC revised.” |
Notes and examples
A good variance analysis usually includes:
- What happened.
- Why it happened.
- Whether the variance is one-time or recurring.
- Impact on schedule, cost, technical scope, and EAC.
- Corrective action, owner, and due date.
- Whether baseline change, MR use, or customer change is required.
Forecasting Decision Table
| Scenario | Better EAC approach | Reason |
|---|---|---|
| Past cost variance is isolated and corrected | AC + (BAC - EV) | Remaining work expected to follow plan |
| Current cost efficiency likely continues | AC + (BAC - EV) / CPI | Historical CPI is predictive |
| Schedule compression will increase cost | AC + (BAC - EV) / (CPI x SPI) | Cost and schedule inefficiency both affect remaining work |
| Remaining work has changed in detail | AC + bottom-up ETC | New estimate is more credible than index-only forecast |
| Major risk has materialized | Bottom-up ETC plus risk impact | Formula-only EAC may miss known future exposure |
| Actuals are incomplete or misposted | Fix AC first | Forecast from bad actuals is misleading |
| Scope change is authorized | Update baseline through change control, then forecast | EAC must reflect authorized scope |
| Work is mostly complete | Bottom-up ETC | Small remaining denominator can distort indices |
| LOE dominates remaining work | Review discrete work separately | LOE can make SPI appear healthier than reality |
Change Control and Reserve Use
| Event | Correct treatment | Incorrect treatment |
|---|---|---|
| Customer adds out-of-scope work | Formal change control; adjust scope, schedule, and budget if authorized | Use MR to fund new scope |
| In-scope risk occurs | Allocate MR if approved and consistent with governance | Hide cost overrun by adding budget after the fact |
| Planning package is detailed | Convert to work packages; maintain traceability | Change total scope without authorization |
| Accounting error found | Correct actual cost data | Rebaseline to remove unfavorable CPI |
| Performance overrun occurs | Analyze, forecast, correct; update EAC | Automatically add budget to erase variance |
| Authorized but not yet priced work appears | Track and budget consistently with authorization rules | Treat as unapproved informal work |
| Baseline no longer useful due major overrun | Consider formal OTB/OTS process | Quietly move historical budgets retroactively |
| Work already performed without authorization | Escalate and resolve authorization issue | Earn EV as if baseline existed |
Notes and examples
Management Reserve Rules
| Rule | Practical meaning |
|---|---|
| MR is outside the PMB | It is not part of performance measurement until allocated |
| MR is for in-scope unknowns | It is not for customer-directed new scope |
| MR allocation should be documented | MR log should show reason, amount, and approval |
| MR allocation changes PMB/BAC for affected work | It should not change CBB by itself |
| MR should not mask poor performance | Cost variance remains visible unless valid baseline change rules apply |
Replanning, Reprogramming, OTB, and OTS
| Term | Meaning | When it appears | Exam distinction |
|---|---|---|---|
| Internal replanning | Adjusting future baseline details within authorized scope/budget | Normal planning refinement | Should preserve traceability and not erase history improperly |
| Reprogramming | More significant restructuring of plans | When current plan is not executable | Requires disciplined approval and documentation |
| OTB | Over-target baseline | Formal recognition that allocated budget exceeds contract budget base | Used when original budget is no longer realistic for management control |
| OTS | Over-target schedule | Formal schedule baseline beyond target/contractual schedule | Schedule management reset, not proof of no delay |
| Single-point adjustment | Resetting variances in a formal rebaseline context | Sometimes associated with OTB | Must be transparent; not routine variance cleanup |
High-yield point: Do not choose rebaseline as the first response to a variance. First validate data, analyze causes, update forecasts, and define corrective action. Formal baseline resets are governance events.
Schedule and EVM Integration
| Concept | What to remember |
|---|---|
| Status date | Common cut-off for PV, EV, AC, and schedule status |
| Integrated master schedule | Should contain logic, durations, milestones, and status consistent with EV |
| Critical path | Determines schedule completion risk better than SPI alone |
| Float/slack | High SPI can coexist with critical path delay if noncritical work earned value early |
| Constraints | Excessive hard constraints can hide schedule logic problems |
| Out-of-sequence work | May earn EV but can distort schedule forecast |
| LOE activities | Should not drive critical path or mask discrete work performance |
| Baseline dates | Must be controlled; unauthorized changes weaken variance meaning |
| Resource loading | Supports time-phased budget and realism of the PMB |
| Schedule risk | Should influence EAC/ETC when recovery actions add cost |
Risk, Contingency, and EAC
Risk is not separate from earned value management; it affects forecast credibility.
\[ \text{EMV} = \text{Probability} \times \text{Impact} \]| Item | Role in EVM |
|---|---|
| Risk register | Identifies threats/opportunities that may affect cost and schedule |
| Management reserve | Budget for in-scope unknowns at management level |
| Contingency in estimates | Planned allowance tied to identified uncertainty, depending on estimating approach |
| EAC | Should reflect known risks, trends, and remaining work realism |
| Corrective action | Should reduce future variance or risk exposure |
| Opportunity | May improve EAC, schedule, or resource use if credible |
Exam trap: a favorable CPI does not eliminate risk. A low-probability, high-impact event may still require management attention and reserve planning.
Data Quality Checks
| Check | Why it matters |
|---|---|
| Does EV correspond to completed, authorized work? | Prevents premature performance credit |
| Does AC match the same scope as EV? | Avoids false CPI |
| Are accruals included? | Prevents favorable CPI caused by late invoices |
| Are baseline changes approved? | Protects PMB integrity |
| Are LOE and discrete work separated? | Prevents LOE from hiding real schedule variance |
| Is PV time-phased to the schedule? | Avoids meaningless SPI/SV |
| Are actual rates and quantities separated? | Helps root-cause cost variance |
| Are material commitments confused with actual costs? | Commitment is not always AC unless reporting rules define it that way |
| Are subcontractor costs/status current? | Late supplier data can distort project metrics |
| Are negative or unusual values explained? | Prevents mechanical formula use |
Common Exam Traps
| Trap | Correct thinking |
|---|---|
| “Positive SV means project will finish early.” | SV is budget-based; check critical path and schedule forecast |
| “SPI = 1.0 means on time.” | At completion SPI often trends to 1.0; use schedule analysis |
| “Use MR to cover overruns.” | MR is for in-scope unknowns, not poor performance |
| “Rebaseline whenever CPI is bad.” | Analyze, forecast, and correct first |
| “AC equals cash paid.” | AC should reflect incurred cost according to accounting/status rules |
| “EV is based on money spent.” | EV is based on budgeted value of completed work |
| “Percent complete is always acceptable.” | It must be objective and verifiable |
| “LOE is harmless.” | LOE can mask schedule variance and inflate performance appearance |
| “All EAC formulas are interchangeable.” | Each formula carries a different assumption |
| “A favorable CPI proves no problem.” | Missing actuals, deferred work, or quality issues may be hidden |
| “Negative VAC requires baseline change.” | VAC is a forecast result; baseline change requires authorization/governance |
| “Undistributed budget is reserve.” | UB is authorized budget not yet distributed; it is not MR |
| “Schedule variance is measured in days.” | Traditional SV is measured in budget units |
| “Budget includes fee/profit automatically.” | EVM budgets generally focus on cost for authorized work; check the reporting basis |
Notes and examples
Trap 1: Confusing PV and EV
If the question says work was scheduled, think PV. If the question says work was completed or accomplished, think EV. If the question says money was spent or cost incurred, think AC.
Trap 2: Treating SPI as a time-delay percentage
SPI is budget-based. A SPI of 0.90 does not automatically mean the project is 10% late in calendar time.
Trap 3: Assuming all variances continue
Before choosing an EAC formula, ask whether the variance is isolated, systemic, or tied to schedule pressure.
Trap 4: Ignoring the data date
EV, PV, and AC must be compared as of the same status date. Mixed cutoff dates produce misleading indices.
Trap 5: Counting material purchase as progress
Buying material may create AC. EV is earned when the planned progress criterion is met, not merely when cash is spent.
Trap 6: Using LOE for measurable work
LOE is not a shortcut for difficult measurement. If work has measurable deliverables, an objective EV technique is usually stronger.
Trap 7: Hiding variance through rebaseline
Authorized changes are valid. Retroactive changes that erase poor performance without traceability are not.
Trap 8: Forgetting management reserve treatment
MR is not part of the normal performance baseline and is not earned as work performance.
Trap 9: Overlooking forecast realism
An EAC may be mathematically possible but operationally unrealistic if TCPI requires performance far better than historical CPI.
Trap 10: Separating schedule logic from earned value
A favorable SPI does not guarantee the critical path is healthy. Always consider schedule logic, float, and milestone status.
Role and Artifact Reference
| Role/artifact | Main purpose | EVP focus |
|---|---|---|
| Project manager | Overall cost, schedule, scope, and stakeholder accountability | Uses EVM to decide and communicate |
| CAM | Manages control account execution | Owns variance explanation and EAC input |
| Scheduler | Maintains integrated schedule | Aligns schedule status with EV status |
| Cost analyst | Calculates metrics and trends | Tests data quality and forecasts |
| Finance/accounting | Provides actual cost data | Ensures AC timing and coding integrity |
| Subcontract manager | Manages supplier performance | Integrates subcontractor EV and actuals |
| Change control board | Reviews baseline changes | Prevents unauthorized PMB movement |
| Risk manager | Maintains risk exposure | Links risk to reserve and EAC |
| WBS dictionary | Defines work scope | Prevents scope ambiguity |
| RAM | Maps responsibility | Shows who owns each control account |
| Work authorization document | Authorizes scope, budget, schedule | Prevents informal work |
| Variance analysis report | Explains significant variance | Must include cause, impact, action |
| EAC log or forecast file | Tracks estimate changes | Supports forecast credibility |
| MR log | Tracks reserve allocation | Shows governance and rationale |
| Baseline change log | Records approved changes | Preserves audit trail |
“What Should the Manager Do Next?” Decision Table
| Situation in question stem | Best next action |
|---|---|
| CPI suddenly worsens | Validate actuals and EV, then analyze root cause |
| SPI is favorable but critical path slipped | Use schedule/critical path analysis; do not rely on SPI alone |
| Supplier invoice missing | Accrue or correct AC before interpreting CPI |
| CAM reports variance with no cause | Require root-cause analysis and corrective action |
| Customer requests added scope | Process through change control before adding baseline budget |
| In-scope technical risk materializes | Assess impact, consider MR allocation, update EAC |
| Control account has future work poorly defined | Convert planning packages to detailed work packages before execution |
| Percent complete appears subjective | Replace or support with objective milestones/physical measures |
| EAC formula conflicts with bottom-up estimate | Evaluate assumptions; use the more supportable forecast |
| TCPI to BAC is much higher than current CPI | Question whether BAC is achievable; update EAC if warranted |
| Historical variances were erased by baseline movement | Challenge baseline integrity and documentation |
| LOE dominates favorable SPI | Separate discrete work analysis from LOE |
| Work performed before authorization | Escalate authorization and baseline control issue |
| Overrun is due to poor productivity | Forecast impact and corrective action; do not use MR automatically |
| Baseline is no longer a useful management tool | Consider formal replanning/OTB/OTS governance |
Rapid Calculation Checklist
Before solving:
- Identify the status date.
- List PV, EV, AC, BAC.
- For variance, start with EV minus something:
- Cost: EV - AC.
- Schedule: EV - PV.
- For index, start with EV divided by something:
- Cost: EV / AC.
- Schedule: EV / PV.
- Positive variance is favorable; index above 1.0 is favorable.
- For EAC, identify the assumption:
- Future at plan.
- Future follows CPI.
- Future affected by CPI and SPI.
- Bottom-up re-estimate.
- Compare TCPI to current CPI for realism.
- Check whether the question asks for calculation, interpretation, or management action.
Final Review Targets
Prioritize these before practice sets:
- EV, PV, AC distinctions.
- CV, SV, CPI, SPI, EAC, ETC, VAC, and TCPI.
- EAC formula assumptions.
- Control account structure and CAM accountability.
- PMB, MR, UB, CBB, and TAB distinctions.
- EV measurement method selection.
- Variance analysis quality.
- Schedule integration and critical path limits of SPI.
- Change control versus MR use versus rebaseline.
- Data quality problems that invalidate metrics.
Next step: work timed earned value calculation and scenario questions, then review each miss by asking whether the error was formula selection, baseline logic, forecasting assumption, or management response.
Core earned value logic
Earned value management links three questions:
| Question | EVM answer | What it tells you |
|---|---|---|
| What work was planned? | PV | Budgeted value of work scheduled by the status date |
| What work was actually accomplished? | EV | Budgeted value of work performed |
| What did the accomplished work cost? | AC | Actual cost incurred for work performed |
The basic comparison is simple:
| Comparison | Metric | Interpretation |
|---|---|---|
| EV vs. PV | Schedule variance/performance | Are we earning value as fast as planned? |
| EV vs. AC | Cost variance/performance | Are we earning value efficiently? |
| BAC vs. EAC | Forecast variance | What is the likely final outcome? |
High-yield trap: EV is not money spent. EV is the budgeted value of completed work. AC is money or cost incurred.
The EVM building blocks
| Term | Quick meaning | Candidate trap |
|---|---|---|
| WBS | Product/scope decomposition | Do not confuse with organization chart |
| OBS | Organizational responsibility structure | Shows who owns the work |
| Control account | Management control point where scope, schedule, budget, actuals, and performance are integrated | Often owned by a control account manager |
| Work package | Near-term, detailed, measurable work | Should have a clear earned value method |
| Planning package | Future work not yet fully detailed | Must still be budgeted and controlled |
| CAM | Control Account Manager | Responsible for performance explanation and corrective action |
| PMB | Performance Measurement Baseline | Excludes management reserve in normal EVM usage |
| MR | Management reserve | Not budget for known, distributed work; not earned as EV |
| BAC | Budget at completion | Usually excludes management reserve |
| EAC | Estimate at completion | Forecasted final cost |
| ETC | Estimate to complete | Forecast cost for remaining work |
| VAC | Variance at completion | Expected underrun or overrun against BAC |
Baseline hierarchy to remember
A reliable EVM system starts with an integrated baseline:
- Define authorized scope.
- Decompose scope through the WBS.
- Assign responsibility through the OBS.
- Create control accounts.
- Break control accounts into work packages and planning packages.
- Time-phase budgets into the schedule.
- Measure progress objectively.
- Collect actual costs in the same structure.
- Analyze variances and forecast outcomes.
- Control changes to preserve baseline integrity.
| Baseline element | What good looks like | What weak control looks like |
|---|---|---|
| Scope | Authorized, traceable, decomposed | Uncontrolled scope growth |
| Schedule | Logic-based, statused, integrated with budget | Excessive constraints, missing logic, stale dates |
| Budget | Time-phased and tied to work | Level-loaded without work basis |
| Actual costs | Collected consistently with control accounts | Cost accounts do not align with EV structure |
| Progress | Objective, documented measurement | Subjective percent complete with no basis |
| Forecast | Based on performance and remaining work | Optimistic reset after every reporting period |
| Changes | Authorized, documented, traceable | Retroactive baseline changes to hide variance |
Formula interpretation table
| Metric | Formula | Favorable result | Unfavorable result | Review note |
|---|---|---|---|---|
| CV | EV - AC | Positive | Negative | Cost efficiency in currency units |
| SV | EV - PV | Positive | Negative | Schedule performance in budget units |
| CPI | EV / AC | Greater than 1.0 | Less than 1.0 | Cost efficiency index |
| SPI | EV / PV | Greater than 1.0 | Less than 1.0 | Schedule efficiency index |
| VAC | BAC - EAC | Positive | Negative | Forecast underrun or overrun |
| ETC | EAC - AC | Lower but realistic | Unrealistically low | Remaining cost forecast |
| TCPI | Work remaining / budget remaining | Achievable if close to historical performance | Risky if much higher than CPI | Required future efficiency |
High-yield trap: A negative SV does not directly mean “late by X days.” Traditional SV is expressed in budgeted cost units, not time.
Forecasting EAC: choose the assumption first
EAC is not one formula. It is a forecast based on an assumption about remaining work.
| Situation | Common EAC approach | Logic |
|---|---|---|
| Past variance is atypical and will not continue | EAC = AC + BAC - EV | Remaining work is expected to follow the original budget |
| Current cost efficiency is expected to continue | EAC = AC + (BAC - EV) / CPI | Remaining work will perform like work completed so far |
| Cost and schedule efficiency both affect remaining work | EAC = AC + (BAC - EV) / (CPI x SPI) | Schedule pressure may drive additional cost impact |
| Original estimate is no longer valid | EAC = AC + bottom-up ETC | Re-estimate remaining work from current knowledge |
| Management-provided forecast is being evaluated | Compare EAC to CPI, TCPI, and remaining scope | Check realism, not just arithmetic |
Notes and examples
flowchart TD
A[Performance data received] --> B{Is the variance isolated?}
B -- Yes --> C[Use AC + BAC - EV]
B -- No --> D{Will current cost efficiency continue?}
D -- Yes --> E[Use AC + remaining work / CPI]
D -- No --> F{Are cost and schedule pressure linked?}
F -- Yes --> G[Consider CPI x SPI method]
F -- No --> H[Use bottom-up ETC]
H --> I[Check TCPI realism]
E --> I
G --> I
C --> I
TCPI decision rule
TCPI tells you the cost efficiency needed on the remaining work to meet a target.
| If target is… | Use | Meaning |
|---|---|---|
| Original budget | TCPI based on BAC | Required efficiency to finish at BAC |
| Revised forecast | TCPI based on EAC | Required efficiency to finish at the forecast EAC |
Exam-style interpretation:
- If CPI is 0.85 and TCPI to BAC is 1.20, finishing at BAC is probably unrealistic without major corrective action.
- If TCPI to EAC is close to recent CPI, the EAC may be plausible.
- If TCPI is dramatically better than historical performance, question the forecast.
Notes and examples
High-yield decision rules
| If you see… | Think… |
|---|---|
| EV less than AC | Cost overrun |
| EV greater than AC | Cost underrun |
| EV less than PV | Behind plan in earned value terms |
| EV greater than PV | Ahead of plan in earned value terms |
| CPI below 1.0 | Cost efficiency problem |
| SPI below 1.0 | Schedule performance problem |
| EAC greater than BAC | Forecast overrun |
| VAC negative | Expected overrun |
| TCPI much greater than CPI | Recovery target may be unrealistic |
| AC unusually low | Check accruals and accounting lag |
| EV unusually high | Check progress measurement validity |
| Repeated baseline changes | Check change control discipline |
Discrete effort vs. LOE vs. apportioned effort
| Work type | Use when | EVM consequence |
|---|---|---|
| Discrete effort | Work has measurable output | Best for performance analysis |
| Level of effort | Work is time-based support with no discrete output | Limited variance insight |
| Apportioned effort | Work is proportional to another measurable task | Depends on quality of base measure |
A common exam decision point is whether a task should be measured objectively. If the work produces a definable deliverable, prefer a discrete method over LOE.
Schedule concepts that matter for EVP review
Earned value candidates must understand schedule quality, not just SPI.
| Concept | Quick review | Exam trap |
|---|---|---|
| Critical path | Longest path controlling project finish | A task with low float may be more urgent than one with high budget variance |
| Total float | Time an activity can slip without delaying project completion | Float is schedule flexibility, not budget |
| Free float | Time an activity can slip without delaying successor start | Not the same as total float |
| Data date | Status point for progress measurement | Actuals and EV should be cut off consistently |
| Baseline schedule | Approved plan for comparison | Do not keep rebasing to erase delay |
| Forecast schedule | Current projection | Should reflect actual progress and remaining logic |
| Logic ties | Dependencies between activities | Missing logic weakens critical path credibility |
| Constraints | Date restrictions | Excessive constraints can distort float |
| Negative float | Forecast completion later than required date | Indicates schedule pressure, not automatically cost overrun |
Traditional SV vs. earned schedule
Traditional earned value schedule variance is useful but limited because it is expressed in budget units. Near project completion, SV can trend toward zero as all work is eventually earned, even if the project finishes late.
Earned schedule concepts translate EV performance into time-based indicators:
| Concept | Meaning |
|---|---|
| ES | Earned Schedule: the time at which the current EV should have been earned according to the baseline PV curve |
| AT | Actual Time: time elapsed to the status date |
| SV(t) | ES - AT |
| SPI(t) | ES / AT |
Use earned schedule thinking when the question emphasizes time-based schedule performance rather than budget-valued schedule variance.
Cost collection and actual cost traps
EVP candidates should expect questions where the arithmetic is easy but the data interpretation is subtle.
| Issue | Why it matters |
|---|---|
| Accounting lag | AC may be understated if invoices or labor charges are late |
| Accruals | Needed to match cost to work performed |
| Commitments | Purchase commitments are not always the same as actual cost incurred |
| Indirect costs | Must be applied consistently with the cost system |
| Rate changes | Labor or overhead rate shifts can affect cost variance |
| Material timing | Buying material early may increase AC before EV is earned |
| Cost account mismatch | Actuals must align with the control account structure |
| Rework | Adds AC and may or may not earn additional EV |
| Scrap/waste | Raises AC without increasing EV |
| Subcontractor reporting | Must be integrated into the same status cycle |
Notes and examples
High-yield trap: A project can look cost-unfavorable because material was purchased early, or falsely cost-favorable because actual costs have not yet been booked.
Variance analysis: what a strong answer includes
A variance explanation should go beyond “CPI is below 1.0.”
| Component | Good variance analysis answers |
|---|---|
| Variance identification | Which control account, work package, or activity is affected? |
| Cause | What specific event or condition caused the variance? |
| Impact | What is the effect on cost, schedule, technical scope, or forecast completion? |
| Corrective action | What will be done, by whom, and by when? |
| Forecast effect | Does the EAC, ETC, or completion date change? |
| Recurrence control | How will the cause be prevented or monitored? |
Weak explanations include:
- “Behind schedule due to delays.”
- “Over budget due to higher costs.”
- “Will recover next month” with no basis.
- “No impact” when CPI, SPI, or critical path evidence suggests otherwise.
Change control and baseline maintenance
AACE Earned Value Professional (EVP) exam candidates should be comfortable distinguishing legitimate baseline maintenance from improper variance masking.
| Action | Usually appropriate? | Why |
|---|---|---|
| Add authorized new scope to the baseline | Yes | Scope, budget, and schedule must reflect authorized work |
| Move budget from planning package to work packages as detail matures | Yes | Normal rolling-wave planning |
| Use management reserve for authorized in-scope unknowns | Yes, with approval | MR is controlled budget, not free performance recovery |
| Correct documented baseline errors | Yes, with traceability | Accuracy matters |
| Replan future work when assumptions change | Sometimes | Must preserve visibility of prior performance |
| Retroactively change completed work budgets to remove variance | Usually no | Masks performance history |
| Earn value for work not completed | No | Breaks EV credibility |
| Treat MR as part of BAC for performance measurement | No | MR is normally outside the PMB |
EVMS guideline intent areas
If your preparation materials reference EVMS guidelines, focus on the management intent behind the requirements.
| Area | What it is trying to ensure |
|---|---|
| Organization | Work scope and responsibility are clearly assigned |
| Planning, scheduling, and budgeting | Authorized work is time-phased into measurable plans |
| Accounting considerations | Actual costs are collected consistently with planned work |
| Analysis and management reporting | Variances are analyzed, explained, and acted on |
| Revisions and data maintenance | Baseline changes are controlled and traceable |
The exam-style issue is often practical: “Which control weakness is present?” or “Which corrective step best preserves baseline integrity?”
Integrated project controls view
Earned value should not be isolated from project controls.
| Control discipline | EVM connection |
|---|---|
| Scope management | Defines what can earn value |
| Schedule management | Determines when value should be earned |
| Cost management | Determines budget and actual cost comparison |
| Risk management | Explains uncertainty and may affect forecasts |
| Change management | Protects the baseline from uncontrolled changes |
| Contract management | Affects reporting, authorization, and cost collection |
| Quality management | Poor quality can create rework and cost variance |
| Forecasting | Converts current performance into expected outcomes |
What to practice next
For the AACE Earned Value Professional (EVP) exam code EVP, use this Cheat Sheet as a final concept map, then move into PM Mastery practice:
- Drill formulas until you can identify the right metric without hesitation.
- Practice EAC selection questions where the assumption matters more than arithmetic.
- Work variance-analysis scenarios that require cause, impact, and corrective action.
- Review baseline-control questions involving MR, PMB, BAC, planning packages, and change control.
- Use original practice questions with detailed explanations to expose weak spots before attempting full mock exams.
Next step: start with targeted topic drills on earned value formulas, baseline structure, forecasting, and variance interpretation, then build up to mixed question-bank practice under exam-like timing.