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CVA meaning in Accounts and Finance ?

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Answer: What is Credit Valuation Adjustment mean?

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. This price depends on counterparty credit spreads as well as on the market risk factors that drive derivatives' values and, therefore, exposure. CVA is one of a family of related valuation adjustments, collectively xVA; for further context here see Financial economics § Derivative pricing.

Unilateral CVA is given by the risk-neutral expectation of the discounted loss. The risk-neutral expectation can be written as

C V A ( T ) = E Q [ L ∗ ] = ∫ 0 T E Q [ L G D B 0 B t E ( t ) | t = τ ] d P D ( 0 , t ) {\displaystyle \mathrm {CVA(T)} =E^{Q}[L^{*}]=\int _{0}^{T}E^{Q}\left[LGD{\frac {B_{0}}{B_{t}}}E(t)|t=\tau \right]d\mathrm {PD} (0,t)}

where T {\displaystyle T} is the maturity of the longest transaction in the portfolio, B t {\displaystyle B_{t}} is the future value of one unit of the base currency invested today at the prevailing interest rate for maturity t {\displaystyle t} , reference

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