Debt Value Adjustment (DVA) definition

A Debt Valuation Adjustment (DVA) is an accounting valuation technique related to how a company handles changes in fixed income securities it has issued. According to FASB 159 (adopted in 2007), firms can recognize market value declines in some debt instruments as earnings. In other words, if the debt decreases in price on the market, by using DVA this can be interpreted as a decrease in liabilities and can therefore be reported as profit.

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