# Do I calculate the Earned Value with BAC or PV?

I'm a little confused on how to calculate the EV. There are two formulas that I found:

• EV = %completion x BAC
• EV = %completion x PV

When do I use which formula?

PV is the values planned for a task or a part of the WBS. BAC is overall budget. So, if you want to calculate overall EV, you may take BAC, otherwise use PV.

Regarding plans, total sum of PV should always be BAC, otherwise you forgot to plan some part of work or you haven't all the budget you might need.

Both work but the percentages are different. If your BAC is \$100,000 and your PV at the period of measurement is \$50,000, you can obtain EV based on percent of whichever value you want. Eighty percent of PV is equal to 40% of BAC. Both would give you \$40,000. So pick a method and stick to it so as not to cause confusion.

As a small caveat to my answer, I suspect you will find that most people, when thinking about project completion, do so comparing their observations with complete. No one would ever really say, "oh, I'm 110% of where I am supposed to be." So percent of completion would be a better bet, I think. Also, remember that the best approach is a physical measurement of what is complete, not a worker's estimate of what (s)he thinks is complete.

EV is earned value, meaning how much value you have at hand right now, i.e. how much of the task is completed in the monetary expression at this moment.

So if you are looking at the EV from the perspective of how much you planned to spend by this date you use PV (Planned value).

``````If you planned to spend 1000\$ by the 10th day of the project and you spend 300\$, your EV would be 30% (300\$*100/1000\$).
``````

It means you are spending less than budgeted, thus you are probaly late on your tasks. PV is related to TASKS, so you are checking how is your EV doing related to the Task budget.

BAC (Budget at Completion) is simply the total project budget, which is the aggregate of all of the task budgets.

``````So if you task has 300\$ spent now and total budject for project 10 000\$, you are now 3% of progress.
``````

What does it give you? It shows you how much weight your task has related to the project in general. The more tasks costs, the more important it is. So if you are behind on small tasks it's more or less or, if you are behind on mammoth ones, you are in trouble.

• AC are not part of the question. EV has nothing to do with what was spent. AC is what was spent. So if EV if \$300, he is not "probably" late; he IS late. We have no idea about what was spent because there is no indication of AC. Aug 26 '20 at 14:07
• AC is actual cost what you actually spent. And I said "how much of the task is completed in the monetary expression at this moment". You don't see a difference? Aug 26 '20 at 14:12
• So if your EV is below you Planned budget, then you should think what to do with that. Aug 26 '20 at 14:14
• I am not understanding your English in your comment. You're answer is conflating AC with EV. You wrote, if you spent \$300, then your EV is.... That is incorrect. What you spend has nothing to do with EV. What you spend is AC. What you complete is EV. All three--EV, AC, and PV--are independent variables. Aug 26 '20 at 14:31
• Ok. David. Just to make sure, this is the definition of EV - I would hope you understand English from Wrike, so have a read. Aug 26 '20 at 15:22