Which EAC formula should I use?

It depends on what you believe about the remaining work. Use EAC = BAC / CPI, the most common formula, when you expect current cost efficiency to continue, which is the safe default once the project is past about twenty percent complete and CPI has settled. Use EAC = AC + (BAC − EV) when the overrun came from a one-off event that will not recur, so the rest of the job runs at the original budgeted rate. Use EAC = AC + (BAC − EV) / (CPI × SPI) when the project is both over budget and behind schedule and the schedule pressure is driving cost. And when none of those fit, replace the formula with a fresh bottom-up estimate of the remaining work.

What is the difference between EAC and ETC?

EAC is the forecast of the total final cost of the whole project; ETC is the forecast of only the work that is left. They are tied together by the money already spent: EAC equals actual cost plus ETC, so ETC equals EAC minus actual cost. On our example, the forecast finish (EAC) is fourteen million, six point three million of which is already spent, so the estimate to complete the remaining work (ETC) is seven point seven million. EAC answers "where will we end up"; ETC answers "how much more will it take from here".

Can EAC be lower than the budget?

Yes. When a project is running under budget, its cost performance index is above 1.0, and EAC = BAC / CPI comes out below the budget at completion, giving a positive variance at completion, a forecast underrun. That is the good case. On our example the opposite is true: CPI is 0.857, so EAC of fourteen million sits two million above the twelve-million budget, and VAC is negative two million. The sign of VAC is the quickest read of the forecast: positive is coming in under, negative is heading over.

Construction Glossary · Earned Value

Estimate atCompletion

Where earned value stops describing the past and starts forecasting the finish. EAC projects the final cost, ETC the work still left, and VAC the overrun you are heading for.

Definition

Estimate at completion (EAC) is the forecast of what a project will finally cost, projected from performance so far. Estimate to complete (ETC) is the cost of the work still remaining (EAC minus actual cost), and variance at completion (VAC) is the forecast overrun or underrun against budget (BAC minus EAC).

The forecast is the actual curve, extended

Our project has spent $6.3M by month 8 and is running at a CPI of 0.857. Project that efficiency forward and the finish lands near $14.0M, two million above the $12.0M budget.

EAC, ETC, and VAC

EAC

Estimate at Completion

The forecast total cost of the whole project. BAC ÷ CPI = $12.0M ÷ 0.857 = $14.0M.

ETC

Estimate to Complete

The cost of the work still left. EAC − AC = $14.0M − $6.3M = $7.7M.

VAC

Variance at Completion

The forecast overrun or underrun. BAC − EAC = $12.0M − $14.0M = −$2.0M.

The four EAC formulas

There is no single EAC. Which formula is right depends on what you believe about the work that remains.

Formula	Use it when	Our example
EAC = BAC ÷ CPI	Current cost efficiency will continue (the safe default past ~20% complete)	$12.0M ÷ 0.857 = $14.0M
EAC = AC + (BAC − EV)	The overrun was a one-off; remaining work runs at budget	$6.3M + $6.6M = $12.9M
EAC = AC + (BAC − EV) ÷ (CPI × SPI)	Over budget and behind schedule, schedule pressure drives cost	$6.3M + $6.6M ÷ 0.771 = $14.9M
EAC = AC + bottom-up ETC	None of the above fit; re-estimate the remaining work	depends on the re-estimate

How POD forecasts the finish

POD derives EAC, ETC, and VAC from the CPI it computes against the frozen baseline, updated each period as costs and progress land, so the forecast moves with the job rather than sitting stale in a spreadsheet. Because the baseline is versioned, an approved change resets what BAC and the forecast are measured against without losing the original.

The full EAC guide

Frequently asked questions

From today's numbers to the finish

The forecast is only as honest as the index behind it. Pair EAC with the reality check of TCPI to see whether the budget is still reachable.

To-Complete Performance Index Back to the Glossary