When to use it
Use it for the remaining funding discussion once the final-cost forecast is credible.
Do not subtract costs measured on a different date or basis from the final forecast.
- Define the scope, status date and units before collecting the inputs.
- Substitute the values into the formula and retain their units.
- Interpret the result against the assumptions and decide what evidence or action is needed next.
Formula & inputs
EAC is the current estimate at completion; AC is actual cost to the same status date.
Worked example
A delivery project has budget at completion of €900,000. At the same status date, planned value is €450,000, earned value is €360,000 and actual cost is €400,000. All values use the same scope and price basis.
This is the remaining forecast cost under the continuing-efficiency assumption. A fresh bottom-up ETC can instead be used to build a new EAC.
Common pitfall
Confusing remaining budget with the expected remaining cost hides an emerging funding gap.
Source & related material
Standard quantitative technique; this explanation is by fannarmaximus. No single inventor is claimed. The arithmetic is computed from explicit inputs, not copied from an official sample question.