What is EVM, earned value management?

At every monitoring point the planned value (PV), earned value (EV) and actual cost (AC) are monitored. PMB, performance measurement baseline is the aggregation of all planned values. Variances from baselines are determined and Schedule variance (SV) and cost variance (CV) are calculated. If earned value is equal to the planned value then the project is achieving what it is supposed to. If there is schedule or cost variance is significant, appropriate action needs to be taken to correct the slips. Estimate at completion (EAC) is estimated and compared with budget at completion. In case there is a slip, the cost consequences will be known.