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 posted or paid in the accounting system. 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 Earned Value Management (EVM), accrued costs are captured as Estimated Actual Costs so that Actual Cost of Work Performed (ACWP) reflects the true cost of work performed, not just what's been posted or paid.
What this means for you
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 aligned with the work actually performed and reported as earned value (BCWP).
Also known as
N/A
Used in
Actual Cost of Work Performed; Cost Variance; Cost Performance Index
FAQ
Is an accrual the same as an estimate?
Accruals are estimates of the costs related to work already performed but not yet posted or 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 earned value of 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.
