Accrual
EVM Terms
Reviewed by forProject Technology - updated Sep 2026
Quick definition: An Accrual is the recording of actual costs for work that has been performed but not yet paid for. Sometimes called "Estimated Actual Costs."
Accrual accounting recognizes a cost in the period the work happened, even though the invoice or payment hasn't been processed yet. In EVM, accrued costs are captured as Estimated Actual Costs so that ACWP reflects the true cost of work performed, not just what's been paid.
Why it matters
Without accruals, ACWP would understate true costs whenever there's a lag between work being done and invoices being paid, making cost performance look better than it really is. Capturing accruals keeps cost data timely and accurate.
Also known as
N/A
Used in
Actual Cost of Work Performed (ACWP) calculations and all derivative metrics
FAQ
Is an accrual the same as an estimate?
Accruals are estimates of the costs related to work already performed but not yet recorded as paid in the accounting system. The word "estimate" is also used for costs that will be incurred in the future as work is performed.
Why not just wait for the invoice and actual payment before recording the cost?
In EVM, we compare the work actually performed (BCWP) with the cost incurred to perform it (ACWP) to determine the Cost Variance. If work is performed this period and BCWP is claimed, but the actual cost (ACWP) doesn't show up until a later month, the current month will look like it accomplished something for free.
Definition maintained by forProject Technology.
© 2026 forProject Technology, Inc.
© 2026 forProject Technology, Inc.
