Value Change Dump (VCD) is an IEEE standard (1364) describing an ASCII-based format for dump files generated by EDA logic simulation tools. The standard, four-value VCD format was defined along with the Verilog hardware description language by the IEEE Standard 1364-1995 in 1995. An Extended VCD (eVCD) format defined six years later in the IEEE Standard 1364-2001 supports the logging of signal strength and directionality. The simple and yet compact structure of the VCD format has allowed its use to become ubiquitous and to spread into non-Verilog tools such as the VHDL simulator GHDL and various kernel tracers. A limitation of the format is that it is unable to record the values in memories.
The following image shows importing of VCD or eVCD file:
Importing VCD
Since the VCD file does not contain the direction information you must select the UUT Direction for each signal: Input, Output or Bidir (bidirectional). If you have selected the Bidir direction you must also select the signals that will be used to be used as direction signals from the Bidirectional Control column.