A typical case is when a financial institution enters into an uncollateralized derivative with a client and an offsetting collateralized trade on the same terms with a central counterparty or another financial institution. The institution funds the collateral it posts on the collateralized offsetting trade at its own funding rate, and that cost is FVA.
There are several ways to calculate FVA, and care is needed so that FVA and DVA together do not count the benefit from the firm's own default twice. One way to avoid double counting is to leave out of FVA the funding benefit when the value is negative (Funding Benefit Adjustment, FBA).