According to our book project management book, it says “Assessing the current status of a project using the earned value cost/schedule system requires three data elements, planned cost of the work scheduled (PV), budgeted cost of the work completed (EV), and actual cost of the work completed (AC)” (p.465).
In the Glossary it says earned value (EV) “is the physical work accomplished plus the authorized budget for this work”(p.660). Additionally, “EV is the percent of the original budget that has been earned by the actual work completed”(p.463)”
PV or Planned budgeted value of work schedule” is an approved cost estimate of the resources schedule in a time-phased cumulative baseline” (p.463). “The baseline is the sum of the accounts, and each cost account is the sum of the work packages in the cost account; three direct costs included in baseline is labor, equipment, and materials” (p.465).
Actual cost of the work completed (AC) “is the sum of the costs incurred in accomplishing work”.
The reason you want these EVM performance measure is for the project control process, which is the process of comparing actual performance against plan to identify deviations, evaluate possible alternative courses of actions, and take appropriate corrective action” (p.458). Additionally, “a major goal of progress reporting is to catch any negative variances from plan as early as possible to determine if corrective action is necessary” (p.459). And finally, “the project network schedule, derived from the WBS/OBS, serves as the baseline to compare against actual performance” (p.459).