Cos’è il CVA (credit valuation adjustment)?

Credit valuation adjustment (CVA) is the difference between the risk-free portfolio value and the true portfolio value that takes into account the possibility of a counterparty’s default. In other words, CVA is the market value of counterparty credit risk.

What is DVA debit valuation adjustment?

Debit Valuation Adjustment (DVA) The debit valuation adjustment is the impact of your credit risk on the value of a derivative (which would be the CVA from the perspective of your counterparty looking at you).

What is DVA and CVA?

While DVA is a valuation technique related to how a company handles changes in its fixed income security, CVA is essentially the market value of counterparty credit risk, which involves the other party in a financial transaction.

What is a valuation adjustment account?

Essentially, valuation adjustments make accounting records reflect the current market value of the asset or liability rather than the historical cost. An increase in assets will be accompanied by a gain on the income statement or an increase in other comprehensive income.