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Earned Value Management

Term in Qoyod's Accounting Glossary — Practical definition with examples from the Saudi market.

What is Earned Value Management?

Earned value management (EVM) is a project performance technique that integrates scope, schedule, and cost data into objective metrics. It compares planned work and actual work to forecast final cost and completion date.

How It Works

  • Establish the performance measurement baseline — scope, schedule, and budget.
  • Track planned value (PV) — the budgeted cost of work scheduled.
  • Track earned value (EV) — the budgeted cost of work completed.
  • Track actual cost (AC) — the actual spend on completed work.
  • Compute variances and indices (SV, CV, SPI, CPI) and forecast EAC and ETC.

Saudi Context

EVM is a standard requirement on most Vision 2030 infrastructure and giga-projects in Saudi Arabia, including those run by PIF subsidiaries. Contractors must report monthly EVM dashboards that align with the PMI standard and the client’s contract terms.

Example

A SAR 10M project at month six shows PV = SAR 5M, EV = SAR 4.5M, AC = SAR 5.2M. The project is behind schedule (SV = −500K) and over budget (CV = −700K), with a CPI of 0.87.

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