What's the difference between VAC and CV?

Cost Variance (CV = EV − AC) compares earned and actual cost to date — past performance. Variance at Completion (VAC = BAC − EAC) compares the budget with the forecast end cost — future direction. CV explains today; VAC explains the destination. Mature reports show both.

Which EAC formula should I use?

EAC₂ (BAC ÷ CPI) is the default for most stable projects. EAC₃ (the CPI × SPI variant) is used when both cost and schedule are under pressure. EAC₁ assumes future work runs at planned rate and is rarely realistic. The honest report shows the range.

Yes — a positive VAC means the project is forecast to finish under budget. It is rarer than the reports suggest; many positive VACs evaporate as remaining risk crystallises, which is why mature teams pair VAC with risk and contingency status.

Is VAC the same as Estimate at Completion variance?

Effectively yes. VAC is the formal earned-value name; many cost reports informally label the same number 'forecast variance' or 'EAC variance'. The key is that it compares the original budget with the current forecast, not with current actuals.

Why do my VAC numbers swing month to month?

Usually because the EAC behind them is unstable — either CPI is moving fast, or the team is switching between EAC formulations without telling the reader. Stabilise the formulation, refresh CPI on a consistent rule, and the VAC stabilises with it.

How do I report VAC honestly?

Lead with the VAC range, state the EAC formulation, show CPI alongside, and tie to remaining contingency. Add a trend chart of the last six months. The combination is harder to dispute and easier to act on.

Increasingly yes, on cost-loaded epics or capitalised programmes. The mechanics are the same; the inputs come from epic-level cost reporting rather than activity-level reporting. The governance trigger thresholds are usually tighter because agile programmes have shorter cycles.

Which calculators on PMMilestone.org apply to Variance at Completion?

For Variance at Completion, the most relevant tools on the flagship platform are the EVM, SPI and CPI calculators on PMMilestone.org. They reproduce the formulas referenced in this entry against your own project data.

What is a common misconception about Variance at Completion?

That the topic is well-defined across all references. In practice, definitions vary between PMBOK, PRINCE2, AACE and ISO 21500 — this entry uses the definition most aligned with field practice on capital projects, and flags where the standards diverge.

Which related encyclopedia entries should I read alongside Variance at Completion?

Read Earned Value Management, Critical Path Method and the DCMA 14-point assessment next. The full A–Z is available in the PMMilestone Encyclopedia, and quick one-line definitions live in the PM Glossary on the flagship platform.

How does Dr. Hassan Eliwa's research treat Variance at Completion?

Dr. Hassan Eliwa's research focuses on owner-side project controls, schedule integrity and forensic delay analysis on capital construction and power programmes. Variance at Completion is treated through that lens — what a planning or controls engineer is expected to do with it on a live project, not its textbook definition alone. See the full research library at PMMilestone Research Articles.

How is Variance at Completion defined on PMMilestone Research & Insights?

The forecast difference between the budget at completion (BAC) and the estimate at completion (EAC) — the single number that tells the board where the project is heading financially. For the full treatment, see the definition, principles, applications and related entries above — every encyclopedia entry follows the same research-grade structure.

What's the difference between VAC and CV?

Cost Variance (CV = EV − AC) compares earned and actual cost to date — past performance. Variance at Completion (VAC = BAC − EAC) compares the budget with the forecast end cost — future direction. CV explains today; VAC explains the destination. Mature reports show both.

Which EAC formula should I use?

EAC₂ (BAC ÷ CPI) is the default for most stable projects. EAC₃ (the CPI × SPI variant) is used when both cost and schedule are under pressure. EAC₁ assumes future work runs at planned rate and is rarely realistic. The honest report shows the range.

Yes — a positive VAC means the project is forecast to finish under budget. It is rarer than the reports suggest; many positive VACs evaporate as remaining risk crystallises, which is why mature teams pair VAC with risk and contingency status.

Is VAC the same as Estimate at Completion variance?

Effectively yes. VAC is the formal earned-value name; many cost reports informally label the same number 'forecast variance' or 'EAC variance'. The key is that it compares the original budget with the current forecast, not with current actuals.

Why do my VAC numbers swing month to month?

Usually because the EAC behind them is unstable — either CPI is moving fast, or the team is switching between EAC formulations without telling the reader. Stabilise the formulation, refresh CPI on a consistent rule, and the VAC stabilises with it.

How do I report VAC honestly?

Lead with the VAC range, state the EAC formulation, show CPI alongside, and tie to remaining contingency. Add a trend chart of the last six months. The combination is harder to dispute and easier to act on.

Increasingly yes, on cost-loaded epics or capitalised programmes. The mechanics are the same; the inputs come from epic-level cost reporting rather than activity-level reporting. The governance trigger thresholds are usually tighter because agile programmes have shorter cycles.

Which calculators on PMMilestone.org apply to Variance at Completion?

For Variance at Completion, the most relevant tools on the flagship platform are the EVM, SPI and CPI calculators on PMMilestone.org. They reproduce the formulas referenced in this entry against your own project data.

What is a common misconception about Variance at Completion?

That the topic is well-defined across all references. In practice, definitions vary between PMBOK, PRINCE2, AACE and ISO 21500 — this entry uses the definition most aligned with field practice on capital projects, and flags where the standards diverge.

Which related encyclopedia entries should I read alongside Variance at Completion?

Read Earned Value Management, Critical Path Method and the DCMA 14-point assessment next. The full A–Z is available in the PMMilestone Encyclopedia, and quick one-line definitions live in the PM Glossary on the flagship platform.

How does Dr. Hassan Eliwa's research treat Variance at Completion?

Dr. Hassan Eliwa's research focuses on owner-side project controls, schedule integrity and forensic delay analysis on capital construction and power programmes. Variance at Completion is treated through that lens — what a planning or controls engineer is expected to do with it on a live project, not its textbook definition alone. See the full research library at PMMilestone Research Articles.

How is Variance at Completion defined on PMMilestone Research & Insights?

The forecast difference between the budget at completion (BAC) and the estimate at completion (EAC) — the single number that tells the board where the project is heading financially. For the full treatment, see the definition, principles, applications and related entries above — every encyclopedia entry follows the same research-grade structure.

Earned Value · Letter V

Variance at Completion

The forecast difference between the budget at completion (BAC) and the estimate at completion (EAC) — the single number that tells the board where the project is heading financially.

By Dr. Hassan Eliwa, PhD · Founder of PMMilestone.org and PMMilestone.com · Updated 2026-06-29

Definition

Variance at Completion (VAC) is a forward-looking earned-value metric that compares the original Budget at Completion (BAC) with the current Estimate at Completion (EAC). The formula is simple — VAC = BAC − EAC — and the meaning is direct: a positive VAC means the project is forecast to finish under budget; a negative VAC means an overrun is forecast. Where Cost Variance (CV) tells you where you are today, VAC tells you where you are heading.

Why It Matters

VAC is the single most useful number on the cost slide. CV explains the past; CPI explains the rate; EAC explains the destination; VAC turns EAC into a comparable headline against the budget the board originally approved. Without VAC, a healthy CV on a project that will still overrun looks reassuring. With VAC, the truth is unavoidable.

Formulas

Variance at Completion: VAC = BAC − EAC.
Percent Variance: VAC% = VAC / BAC × 100.
Time variant: some controls teams also compute Schedule Variance at Completion (SVAC) using earned schedule methods, comparing the planned and forecast end dates.

How EAC Drives VAC

The integrity of VAC depends entirely on the integrity of EAC. The three common EAC formulations produce very different VACs on the same project:

EAC₁ = AC + (BAC − EV) — assumes future work runs at planned rate. Optimistic. VAC is usually too low (i.e. too good).
EAC₂ = BAC / CPI — assumes future work runs at the historical cost performance. The default for most stable projects.
EAC₃ = AC + (BAC − EV) / (CPI × SPI) — assumes both cost and schedule pressure continue. The most pessimistic; useful when both indices are below 1.

Reporting VAC without stating which EAC formulation it came from is dangerous; the same project can produce three quite different VACs depending on the formula.

Real-World Construction Example

A 36-month substation programme had BAC of $210m. At month 18, AC was $108m, EV was $95m, and CPI was 0.88. The three EAC views produced:

EAC₁ = $108m + ($210m − $95m) = $223m → VAC = −$13m.
EAC₂ = $210m / 0.88 = $239m → VAC = −$29m.
EAC₃ assuming SPI of 0.92 = $240m → VAC = −$30m.

The controls team reported the EAC₂/EAC₃ range as the headline — minus $29m to minus $30m — with assumption traceability. Leadership released contingency and authorised a recovery plan. Reporting only EAC₁ would have understated the overrun by half and delayed the recovery by six months.

Real-World IT / Agile Example

An agile programme with cost-loaded epics ran VAC quarterly. BAC for the year was $14m. By mid-year, AC was $8.4m, EV was $6.7m, CPI was 0.80. EAC₂ = $17.5m. VAC = −$3.5m, or −25%. The product organisation cut two low-value epics worth $2.8m to bring VAC back inside tolerance. Without VAC, the conversation would have been about velocity dips, which the leadership could not act on.

Best Practices

Report VAC alongside CV and CPI; the three together tell the past, the rate, and the destination.
State the EAC formulation; never report a VAC without it.
Use a VAC range (best/likely/worst) for honesty when CPI and SPI are unstable.
Refresh monthly; VAC is a forecast and ages quickly.
Tie VAC to contingency: if VAC consumes more than X% of remaining contingency, escalate.

Common Mistakes

Reporting VAC computed from EAC₁ as if it were neutral; it understates overruns on projects with weak CPI.
Confusing VAC with Cost Variance; CV is past, VAC is forecast.
Treating VAC as a single point; the EAC behind it is a range.
Updating VAC quarterly on fast-moving projects; the number is always behind.
Reporting VAC without contingency context; "−$10m" means very different things on $200m and $2bn projects.
Failing to link VAC to a recovery plan when negative; the report becomes commentary instead of action.

Expert Tips

Lead with VAC on the cost slide. It is the number leadership actually needs.
Show CPI alongside. A negative VAC with stable CPI is a different conversation from a negative VAC with declining CPI.
Bracket the forecast. EAC range, VAC range, contingency consumption — the three together are the honest picture.
Build a VAC trend chart. A widening VAC over three months is the canary; a stable VAC is the all-clear.
Tie VAC to governance triggers. Above 5% bad, the steering committee is notified; above 10%, contingency is reviewed; above 15%, formal recovery plan.

Practical Lessons Learned

VAC honesty is a leadership decision more than a controls decision.
The first overrun is the cheapest to fix; VAC is the metric that surfaces it earliest.
Teams that report VAC monthly build credibility; teams that delay reporting lose it.

Key Takeaways

VAC = BAC − EAC: the forecast cost variance at the end of the project.
Honest VAC depends on honest EAC; report the formula and the range.
Pair VAC with CV, CPI, and contingency consumption for the full picture.
Refresh monthly; the metric is forward-looking and ages.
Use VAC thresholds as governance triggers, not as static reports.

Related Encyclopedia Entries

Frequently Asked Questions

What's the difference between VAC and CV?
Cost Variance (CV = EV − AC) compares earned and actual cost to date — past performance. Variance at Completion (VAC = BAC − EAC) compares the budget with the forecast end cost — future direction. CV explains today; VAC explains the destination. Mature reports show both.
Which EAC formula should I use?
EAC₂ (BAC ÷ CPI) is the default for most stable projects. EAC₃ (the CPI × SPI variant) is used when both cost and schedule are under pressure. EAC₁ assumes future work runs at planned rate and is rarely realistic. The honest report shows the range.
Can VAC be positive?
Yes — a positive VAC means the project is forecast to finish under budget. It is rarer than the reports suggest; many positive VACs evaporate as remaining risk crystallises, which is why mature teams pair VAC with risk and contingency status.
Is VAC the same as Estimate at Completion variance?
Effectively yes. VAC is the formal earned-value name; many cost reports informally label the same number 'forecast variance' or 'EAC variance'. The key is that it compares the original budget with the current forecast, not with current actuals.
Why do my VAC numbers swing month to month?
Usually because the EAC behind them is unstable — either CPI is moving fast, or the team is switching between EAC formulations without telling the reader. Stabilise the formulation, refresh CPI on a consistent rule, and the VAC stabilises with it.
How do I report VAC honestly?
Lead with the VAC range, state the EAC formulation, show CPI alongside, and tie to remaining contingency. Add a trend chart of the last six months. The combination is harder to dispute and easier to act on.
Does agile use VAC?
Increasingly yes, on cost-loaded epics or capitalised programmes. The mechanics are the same; the inputs come from epic-level cost reporting rather than activity-level reporting. The governance trigger thresholds are usually tighter because agile programmes have shorter cycles.
Which calculators on PMMilestone.org apply to Variance at Completion?
For Variance at Completion, the most relevant tools on the flagship platform are the EVM, SPI and CPI calculators on PMMilestone.org. They reproduce the formulas referenced in this entry against your own project data.
What is a common misconception about Variance at Completion?
That the topic is well-defined across all references. In practice, definitions vary between PMBOK, PRINCE2, AACE and ISO 21500 — this entry uses the definition most aligned with field practice on capital projects, and flags where the standards diverge.
Which related encyclopedia entries should I read alongside Variance at Completion?
Read Earned Value Management, Critical Path Method and the DCMA 14-point assessment next. The full A–Z is available in the PMMilestone Encyclopedia, and quick one-line definitions live in the PM Glossary on the flagship platform.
How does Dr. Hassan Eliwa's research treat Variance at Completion?
Dr. Hassan Eliwa's research focuses on owner-side project controls, schedule integrity and forensic delay analysis on capital construction and power programmes. Variance at Completion is treated through that lens — what a planning or controls engineer is expected to do with it on a live project, not its textbook definition alone. See the full research library at PMMilestone Research Articles.
How is Variance at Completion defined on PMMilestone Research & Insights?
The forecast difference between the budget at completion (BAC) and the estimate at completion (EAC) — the single number that tells the board where the project is heading financially. For the full treatment, see the definition, principles, applications and related entries above — every encyclopedia entry follows the same research-grade structure.

Variance at Completion

Definition

Why It Matters

Formulas

How EAC Drives VAC

Real-World Construction Example

Real-World IT / Agile Example

Best Practices

Common Mistakes

Expert Tips

Practical Lessons Learned

Key Takeaways

Related Encyclopedia Entries

Related Research Articles, Case Studies & Tools

Frequently Asked Questions

People also ask

Which learning track covers this end-to-end?

Which book goes deeper than this entry?

Which calculator on PMMilestone.org applies here?

Where is this in the glossary?

Related Entries

Further reading on PMMilestone.org