  This paper provides a mathematical framework based on the principle of
invariance to classify institutions in two paradigms according to the way in
which credit, debit and funding adjustments are calculated: accounting and
management perspectives. This conceptual classification helps to answer
questions such as: In which paradigm each institution sits (point of
situation)? Where is the market consensus and regulation pointing to (target
point)? What are the implications, pros and cons of switching perspective to
align with future consensus (design of a transition)? An improved solution of
the principle of invariance equations is presented to calculate these metrics
avoiding approximations and irrespective of the discounting curve used in Front
Office systems. The perspective is changed by appropriate selection of inputs
always using the same calculation engine. A description of balance sheet
financing is presented along with the justification of the funding curves used
for both perspectives.
