Chapter 2 EVMS METRICS

The traditional metrics in EVMS were developed from standard cost system measurements. EV compares actual cost, budget estimates, and schedule performance to produce cost and schedule variances in dollar-denominated metrics. It is a way to express performance measures and variances in comparable financial terms in a manner similar to the variance reports of standard costing systems.

A key component of EVMS is the establishment of control accounts. A control account is a portion of the project plan assigned to a specific organizational unit where costs can be budgeted and actual costs tracked so that performance (earned value) can be determined. The accounting department establishes multiple control accounts in the general ledger or in a subsidiary ledger with one controlling account in the general ledger. The sum of all control accounts equals the total cost of the project. Thus, EV information is fully integrated with a contractor’s accounting system and is not a stand-alone system.