Letter of Credit Forum

Hello:

http://en.wikipedia.org/wiki/Mark-to-market_accounting

"...Mark-to-market or fair value accounting refers to accounting for the value of an asset or liability based on the current market price of the asset or liability, or for similar assets and liabilities, or based on another objectively assessed "fair" value. Fair value accounting has been a part of the U.S. Generally Accepted Accounting Principles (GAAP) since the early 1990s, and has been used increasingly since then.

Mark-to-market accounting can make values on the balance sheet change frequently, as market conditions change. In contrast, book value, based on the original cost/price of an asset or liability, is more stable but can become outdated and inaccurate. Mark-to-market accounting can also become inaccurate if market prices deviate from the "fundamental" values of assets and liabilities. Buyers and sellers may claim a number of specific instances when this is the case, including inability to accurately collectively value the future income from assets and expenses from liabilities, possibly due to incorrect information or over-optimistic and over-pessimistic expectations...."

cheers

phill doran

 ...time flies like an arrow...fruit flies like a banana...