Cost baseline
“Cost Baseline” is an output for the process “Determine budget”.
The cost baseline is the approved version of the time-phased project budget, excluding any management reserves, which can only be changed through formal change control procedures and is used as a basis for comparison to actual results. It is developed as a summation of the approved budgets for the different schedule activities.
Figure 7-8 illustrates the various components of the project budget and cost baseline. Activity cost estimates for the various project activities along with any contingency reserves for these activities are aggregated into their associated work package costs. The work package cost estimates, along with any contingency reserves estimated for the work packages, are aggregated into control accounts. The summation of the control accounts make up the cost baseline. Since the cost estimates that make up the cost baseline are directly tied to the schedule activities, this enables a time-phased view of the cost baseline, which is typically displayed in the form of an S-curve, as is illustrated in Figure 7-9.
Management reserves are added to the cost baseline to produce the project budget. As changes warranting the use of management reserves arise, the change control process is used to obtain approval to move the applicable management reserve funds into the cost baseline.
Activity Cost Estimates Activity Contingency Reserve Work Package Cost Estimates Contingency Reserve Cost Baseline Control Accounts Management Reserve Project Budget Project Budget Component Total Amount Figure 7-8. Project Budget Components BAC Project Budget Management Reserve Funding Requirements Cost Baseline Expenditures Time Cumulative Values Figure 7-9. Cost Baseline, Expenditures, and Funding Requirements
This definition was found in the PMBOK V5
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