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# CVA and DVA

##### New Member
Subscriber
While calculating CVA and its properties do we need to use negative sign???

#### QuantMan2318

##### Active Member
Subscriber
Can you be a bit more clear? Which formula are you referring to in CVA?

The value for CVA is just:

$(1- Recovery Rate) * \Sigma_{i=1}^m DF(t_i) * EE(t_i) * PD(t_{i-1},t_i)$

So which part are you referring to?

#### Flashback

##### Active Member
While calculating CVA and its properties do we need to use negative sign???
Value of CVA is marked with positive prefix as this is considered as a cost.
Value of DVA is usually marked with negative prefix as a cost deduction.
Thus, stand-alone CVA cannot be negative while net BCVA can be negative in the event of larger DVA value.
Hope that might help.

##### New Member
Subscriber
As per Gregory chapter 14 he has introduced a negative sign in CVA formula, so am a little confused as to what should be the impact of credit spread and recovery on CVA. Whether we have to consider the magnitude or sign also

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#### Flashback

##### Active Member
That’s trivial. If you use negative prefix for CVA, you must use a positive one for DVA in BCVA equation and vice versa. Same as with any other cost recognition in ledgers.