In the context of derivatives valuation, it is a broad category of adjustments that are made to the fair value of a derivative instrument (financial derivatives), aiming to account for funding costs (FVA), initial margin (MVA), credit risk and counterparty risk/ credit deterioration (CVA), cost of own’s default (DVA), regulatory capital requirements (KVA), debt value, etc. These costs/ adjustments are added to the prices of new trades.

In general, the cross value adjustments (XVA) can be used for up-front pricing and valuation of future costs associated with derivatives.