Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Economic Snapshot: Alternatives to Mark-to-Market Accounting


Our unscientific poll.


For months, a debate has raged over how best to price assets amid so much economic turmoil. Some are calling for a suspension of the generally accepted accounting principle of mark-to-market, which calls for assets to be valued according to the price they would fetch today. They contend this hurts firms like Bank of America (BAC) and Citigroup (C), because the market's weakness means prices are inordinately low. Putting mark-to-market accounting on ice for a while would allow the financial sector to right itself.

Or create completely inflated balance sheets.

As the Financial Accounting Standards Board prepares to "issue new guidance on mark-to-market rules," Minyanville suggests some attractive alternatives.

Alternatives to Mark-to-Market Accounting

Mark-to-Wahlberg: Assets are valued based on the relative success of Mark Wahlberg's last motion picture. Widely rejected after The Happening's release.

Economic Snapshot
Mark-to-Mark-to-Market: Prices dependent on the popularity of the Mark-to-Market methodology. Currently low.
Mark-to-Bamboozle: Value increases with every clueless investor who buys shares of worthless stock. Also referred to as the Enron Method.

Mark-to-Whim: Asset managers are free to name a price off the top of their heads.

Mark-to-Smugness: Determined by the asset's relevance to alternative energy and green technologies.
Mark-to-Arson: When futures contracts are marked artificially high and all liability must be erased with a five-alarm fire. Also referred to as the Enron Method.

Mark-to-Insecurity: Asset values are awarded slight upticks causing nervous investors to jump on board in fear of missing the rally.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos