# EVM - Basic Elements

EVM consists of the following three basic elements:

• Planned Value
• Actual Cost
• Earned Value

All the three elements are captured on a regular basis as of a reporting date.

## Planned Value

Planned value (PV) is also referred to as Budgeted Cost of Work Scheduled (BCWS). PV or BCWS is the total cost of the work scheduled/planned as of a reporting date.

It is calculated as:

```PV or BCWS = Hourly Rate × Total Hours Planned or Scheduled
```

NOTE: Hourly Rate is the rate at which effort will be valued.

## Actual Cost

Actual cost (AC) is also referred to as Actual Cost of Work Performed (ACWP). AC or ACWP is the total cost taken to complete the work as of a reporting date.

It is calculated as:

```AC or ACWP = Hourly Rate × Total Hours Spent
```

## Earned Value

Earned value (EV) is also referred to as Budgeted Cost of Work Performed (BCWP). EV or BCWP is the total cost of the work completed/performed as of a reporting date.

It is calculated as:

```EV or BCWP = Baselined Cost × % Complete Actual
```

All these three elements can be derived from Work Breakdown Structure by associating the costs to each of the tasks. For a big project, it will be a tedious task to calculate these elements manually. Scheduling software tools like Microsoft Project is used to calculate these three elements.

NOTE: % Completed Planned and % Completed Actual are defined below.

## % Completed Planned

The percentage of work which was planned to be completed by the Reporting Date. It is calculated using the following formula:

```% Completed Planned = PV / BAC
```

## % Completed Actual

The percentage of work which was actually completed by the Reporting Date. It is calculated using the following formula:

```% Completed Actual = AC / EAC
```

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