A Cost Variance (CV) threshold value is expressed as a monetary value. An issue is generated if the CV (the difference between the activity's earned value and the actual cost of performing the activity) falls beyond the threshold values.
Cost Variance is calculated as CV = Earned Value Cost - Actual Cost. A negative value indicates that actual costs have exceeded the value of work performed, which may be considered a cost overrun.
If the lower threshold value is 0, an issue is generated as soon as actual cost of the work is greater than the value of the work. A larger negative value for the threshold indicates that a certain amount of cost overrun may be tolerated before an issue is generated.