Terminology - A

AACE

The Association for the Advancement of Cost Engineering (Cost Engineering - May 2000)

Abnormal Cost

An expense which is not usually incurred when production is at normal level. (A.C.E.)

Absorbed Overhead

The indirect expense which, by means of rates of indirect expense absorption, is allocated to a cost unit. (I.C.W.A.)

Account

Primary grouping of costs established for administrative and accounting purposes. (A.C.E.)

Account Code

Alpha/numeric code used to identify an individual cost account. (A.C.E.)
or
A code used to identify and categorise cumulating data at a desired level. This data can be moneys, effort, etc. (FLUOR)

Accountability

Defined level or point of budget authority and control responsibility. (A.C.E.)

Accounts Payable

Value of goods and services received for which payment has not yet been made. (A.C.E.)
or
The value of goods and services available for use on which payment has not yet been made. (A.A.C.E.)
or
The value of goods and services available for use on which payment has not yet been made. (FLUOR)

Accounts Receivable

Value of goods and services executed for which payment has not yet been received. (A.C.E.)
or
The value of goods shipped or services rendered on which payment has not yet been received. Usually includes an allowance for bad debts. (A.A.C.E.)
or
The value of goods shipped or services rendered to a customer on which payment has not yet been received. (FLUOR)

Accrual

Cost incurred or income earned but not yet recorded in the books. (A.C.E.)
or
Expenditure, which is known to be due, but has not been entered in current accounts. (A.C.E.)

Accrual Basis

System of accounting records based on costs incurred and income earned. (A.C.E.)
or
A predetermined fundamental method for the calculation of expenditure or depreciation, relative to a period of time. (ACE)

Accrued Cost

Total recorded cost plus accruals. (A.C.E.)

Accrued Income

Total recorded income plus accruals. (ACE.)

Accuracy Factor

Factor used in estimating to indicate the likely range or level of accuracy of an estimate. (ACE)

ACE

Association of Cost Engineers. (ACE)

Activity

Operation or process consuming cost, time or resources. (A.C.E.)
or
A measure of production or service in terms of time. (A.C.E.)
or
An operation or process consuming time and, possibly, resources, in the project level schedule. (FLUOR)

Activity Ratio

1. The number of standard hours equivalent to the work produced, expressed as a percentage of the budgeted standard hours.
2. A measured performance compared with a standard or budget. (A.C.E.)

Activity Report

A report portraying activity identification data; Data Information (e.g., earliest start, earliest finish, latest start, latest finish); Path Information (e.g., FLOAT, FREE FLOAT); Organisational Data (e.g., PERFORMING ORGANISATION); Activity Time Span Estimates; and related information. (FLUOR)

Activity Slack

see FLOAT. (FLUOR)

Activity Time Estimate(s) (PERT)

One or three estimates of the time span an activity may require from start to finish. A single time estimate is known as the MOST LIKELY TIME ESTIMATE (MT). Multiple estimates recognise the uncertainty of time estimates in many circumstances. The most common scheme involves the OPTIMISTIC (OT), the MOST LIKELY (ML) and the PESSIMISTIC (PT) TIME ESTIMATES. The three estimates are combined into the EXPECTED TIME (ET) by the relationship ET=(OT+4ML+PT), See also duration and elapsed time (FLUOR)

Activity-on-Arrow Network

A network in which the arrows symbolise the activities. (FLUOR)

Activity-on-Node Network

A network in which the nodes symbolise the activities. (FLUOR) Activity-Oriented Network
A network characterised primarily by the description of activities independently of the kind of presentation; data usually are, attached to activities. The flow of the project is broken down into sequences of activities. (FLUOR)

Actual Completion

The date on which an activity was completed. (FLUOR)

Actual Cost

Known expenditure, which has actually been incurred. (ACE)
or
An accurate assessment of expense, which has actually occurred, based on recorded and measured expenditure. (A.CE)
or
Is the value of work done against a specific cost code, and is defined as follows:
1. procured items - the value of the items received from the supplier and reflected on a delivery note or materials received list and for which the supplier may or may not have been reimbursed.
2. all contracts - (including management contracts). The value of the work done, which may or may not have been measured and invoiced, and for which payment may or may not have been effected.
3. M7ATERIALS ON SITE - the value of the items received from suppliers and subcontractors and reflected on a delivery note or material received list and for which the supplier or subcontractor may or may not have been reimbursed. (EMS.)
or
The cost which was incurred in the performance of an activity or sequence of activities. (FLUOR)

Actual Cost of Work Performed (ACWP)

Known cost or value of work actually completed or of services actually rendered. (A.CE)

Actual Cost Variance (ACV)

The difference between the BUDGETED COST FOR WORK PERFORMED and the ACTUAL COST FOR WORK PERFORMED. (FLUOR)

Actual Expenditure

Is defined as the amount of money which has been paid against a specific order, a subcontract progress certificate or against a specific sort code, for work done or services rendered. (EMS)

Actual Finish (AF)

The actual completion date of an activity. (FLUOR)

Actual Income

Known revenue, which has actually been earned. (A.CE)

Actual Man-hour

Are defined as the number of man-hours actually used to achieve the measured progress. (EMS)
or
Known man-hours actually expended. (A.CE)

Actual Occurrence. (AO)

The actual completion date of an event. (FLUOR)

Actual Overheads

Authorised assessment of known indirect expenses, which have actually occurred. (ACE)
or
An accurate assessment of indirect expenditure, prepared on an actuarial basis. (A.CE)

Actual Quantities

Known quantities actually designed, purchased or installed. (A.CE)

Actual Start (AS)

The actual start date of an activity. (FLUOR)

Actual Time (AT)

The actual time consumed by an activity. (FLUOR)

Actuarial Analysis

A mathematical segregation of expenditure and income, and the determination of future statistics. (A.CE)

Adjusted Cost

An expense, which has been, adjusted from a known standard to take in account some variance in performance or policy. (ACE)

Administration Cost

The expense of formulating the policy, directing the organisation and controlling the operations of an undertaking which is not related directly to a research, development, production, distribution, or selling activity or function. (ICWA)

Administrative Expense

An overhead cost due to general direction of the company, above the plant level; home-office expense when plant is at a separate location. Generally includes executives' salaries, legal, central purchasing and engineering, traffic, accounting, etc. May sometimes be used as a general term to include sales and research expenses as well. (FLUOR)

Advanced Funding

Provision of funds, to cover future payments by contractor for goods or services purchased or secured "for and on behalf of" client. (ACE)

A.F.C.

1. approved for construction.
2. anticipated final cost. (A.CE)

AFD

Approved for design. (A.CE)

AFE

Authorisation for expenditure. A.CE)

Ageing Rate

Pre-determined assessment of depreciation expense or capital cost relative to a period of time. (ACE)
or
A predetermined assessment of depreciation expense or capital cost relative to a period of time. (ACE)

Aggregate Activities

See HAMMOCK. (FLUOR)

Alert Activities List

A listing of activities that have 20 days* or less of remaining total float or have failed to start on the scheduled date. *Time is optional - 20 days is normal. (FLUOR)

Allocation of Costs

The procedure whereby overhead expenses and other indirect charges are assigned back to processing units, cost centres or to products on what is expected to be an equitable basis. All allocations are necessarily somewhat arbitrary. (ACE)
or
The procedure whereby certain costs are assigned back to processing units or to products on what is expected to be an equitable basis. All allocations are necessarily somewhat arbitrary. (FLUOR)

Ancillaries

Necessary auxiliary components, usually unspecified, particularly of plant and equipment. (ACE)
or
Auxiliary items or components which are not specified in detail. but which arc considered necessary for the correct operation of the specified components.
See also APPURTENANCES. (A.C.E.)

Ancillary Cost

Are defined as those costs incurred on a project, which are required to make the equipment fully functional. These costs include (with the cost code):
N Structural Work
P Pipework
Q Platework and Ducting
R Electric
T Instrumentation
U Protective Coatings
V Testing and Commissioning (EMS)

Annual Cost

One of the means of expressing values in the compound interest system, as an equivalent series of equal annual cash flows, or a profitability technique using this expression. (ACE)

Anticipated Final Cost

See FORECAST FINAL COST. (ACE)

Appropriation

Authorised allocation of funds for specified future work. (ACE)
or
The application of available funds for a specific purpose, such as allocation and distribution of NET profits. (ACE)

Appropriation Estimate

Early cost estimate, usually by client, to establish viability of proposed project and to secure necessary funding approvals. (ACE)

Appropriation Request

Documented application for future project funding requirements, prepared for management approval. (ACE)
or
The series of forms by which the technical and economic information concerning a proposed investment is presented to management for approval. (ACE)

Approved Budget

See AUTHORISED BUDGET. (ACE)

Approved Change

See AUTHORISED CHANGE. (ACE)

Approved Cost

See AUTHORISED COST. (ACE)

Approved man-hours

See AUTHORISED MAN-HOURS. (ACE)

Approved Variation

See AUTHORISED VARIATION. (ACE)

Approximate Estimating

The process of determining what the cost of a project should be. It occurs before the preparation of the cost plan and should be based on the clients fundamental requirements. (JAMES NISBET).

Appurtenances

The auxiliaries to either process or non-process equipment; piping, electric, insulation, instrumentation. etc. (ACE)

Architect's Fees

The charges made by a qualified architect on his client for professional services in the design and inspection of buildings or civil construction work. (ACE)
or
Generally the sum of money paid to reimburse the architect for the cost of making surveys, preparing drawings and specifications. The fee covers all direct expenses, overhead, and profit. (FLUOR)

Area

Commercial, process or geographical division of a project as required for execution, control. or reporting purposes. (ACE)
or
A defined geographic location or group of locations at a jobsite, usually treated as a single entity. (FLUOR)

Area priority

Is a number assigned to a process area or unit; i.e. crude unit, coker, utility plant, etc., which indicates a precedence of preferential rating. (FLUOR)

Arrow

A directed connecting line between two nodes. (FLUOR)

Arrow Diagram

A graphic representation of a network, which describes the sequence and interrelationships of all activities involved in a project. (FLUOR)

As-of Date

See EFFECTIVE DATE. (ACE)

As-sold Estimate

Final purchase or contract sales estimate, inclusive of all pre-order changes and adjustments as reflected in the actual as-sold scope of supply or scope of work. (A.CE)

As-Sold Price

Actual value of purchase order or contract as sold, inclusive of all escalation and other price variation conditions. (ACE)

Assets

Current value of property, investments, stock and cash. (ACE)
or
The value of a company's or person's property, investments, cash and stock. (ACE)

Assets Register

See FIXED ASSETS REGISTER. (A.C.E.)

Attribute

The distinguishing, important features or characteristics of an "Entity". (FLUOR)

Authorised Budget

Any budget duly approved by pre-defined level of authority. (ACE)

Authorised Change

Any change to a previously authorised document duly approved by pre-defined level of authority. (ACE)

Authorised Cost

Any cost. Estimated or budgeted, duly approved by pre-defined level of authority. (ACE)

Authorised Estimate

Any estimate duly approved by pre-defined level of authority. (A.C.E.)

Authorised Man-hours

Any estimated or budgeted man-hours duly approved by pre-defined level of authority. (ACE)

Authorised Variation

Client or buyer approved change to previously issued contract or purchase order. (ACE)

Auxiliary Facilities

Non-productive supporting elements, particularly in factory or plant, such as administrative buildings, utilities, services, etc. (ACE)
or
The non-productive elements which provide utilities or other services. They include non-process equipment, other services, buildings, etc. (ACE)
or
The non-productive facilities, which provide utilities (electricity, steam, water, waste disposal, refrigeration) and other services used by the plant such as buildings, change houses, tankage, communications, etc. May also be known as "off-site or "offsite-battery-limits" (OSBL). (FLUOR)

Availability of Capital

The value of funds readily available for purchasing capital goods. (ACE)
or
Value of funds available for capital investment, purchase of goods or services, etc. (ACE)

Average Annual Cost

Conversion of all capital and operating costs to a series of equivalent annual expenses. (ACE)
or
The conversion, by an interest rate and present worth technique of all capital and operating costs to a series of equivalent equal annual expenses. As a system for comparing proposed investments, it requires assumption of a specific minimum acceptable interest rate. (AACE)
or
The conversion by an interest rate and present worth technique, of all capital and operating costs to a series of equivalent equal annual costs. For comparing investments, it requires assumption of a specific minimum acceptable interest rate. (FLUOR)

Average Cost

Arithmetical mean cost calculated by dividing total expense by total quantity. (ACE)
or
Expense which is calculated by dividing the total expense by the total quantity. (ACE)

Average Investment Return

Summation of fixed and variable dividends or profits divided by the value of issued capital (expressed as a percentage). (ACE.)

Average Overhead Rate

Ratio of indirect to direct expenses, normally expressed as a percentage per annum. (ACE)
or
The ratio of indirect to direct expenses, expressed normally as a percentage. (ACE)