Abstract

MARTINEZ, Pablo. Credit, Debit & Funding Value Adjustments in the Valuation of Financial Instruments: The Economic Reality Behind Accounting Adjustment. Cuad. Contab. [online]. 2016, vol.17, n.44, pp.521-542. ISSN 0123-1472.  https://doi.org/10.11144/Javeriana.cc17-44.cdf.

This document aims to highlight the growing importance of knowledge and continuous learning of profound concepts of finance and risk for the accounting profession. By means of an economic-accounting analysis of the counterparty credit risk and own credit risk adjustments proposed by IFRS 13, the author reveals recurrent weaknesses in the issuance and application processes of accounting standards that must be addressed in the short and medium term as challenges characteristic of the profession to ensure that the economic and financial essence of accounting is not distorted. We conclude that having politically strong but technically poorly elaborated standards is to serve interests different to financial and decision-making ones. Accounting should mimic the complexity of transactions and not hide realities as an apparent solution to problems.

Keywords : credit value adjustment; debit value adjustment.

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