Mark to Market

Posted in Finance, Accounting and Economics Terms, Total Reads: 1489

Definition: Mark to Market

Mark to market is also known as the fair value accounting, in mark to market accounting all the assets and liabilities of the company is calculated by the fair value, that is their actual market prices.

Mark to market values of the company changes day to day depending on the market conditions of the company. Its main aim is to provide a true picture of a company's current financial situation.

For example: The market value of the company X’s assets and liabilities as on 1st January 2008 is 100000$ but after the global recession the market value of the company X’s assets and liabilities declined to 70000$ because of the changed market situations.

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