What is Mark for accounting on the market?

Mark to Market Accounting is a business practice in which the value of the asset is evaluated in terms of what these assets should be sold in the open market rather than their "accounting value". Assets, such as securities, futures contracts and loans, can all be appreciated by Mark to accounting on the market, and this tactic has both advantages and disadvantages that should be carefully considered. As with other accounting procedures, as soon as someone begins to use Mark to account on the market, he is obliged to do so for the rest of the time if a special permit from the tax agency is not taken. In some cases, people are actually obliged to use this accounting practice. Futures merchants buy and sell contracts for things that have not yet happened, such as spring crop harvest. The "accounting value" of the asset would be contractually contract price. However, if the asset is marked on the market, it would be appreciated on the basis of what would happen if it was sold immediately in the open market.

Depending on the state of the market, Mark to Market Accounting can create a situation in which someone has more money than he or she or less. The same applies to companies that use Mark for accounting on the market. The advantage of Mark for accounting on the market is that people can publish a profit or loss of without actually causing profit or loss that can be used to reduce the tax burden or to promote the company to investors.

The disadvantage of this practice is that it assumes that the current market reflects the real value for the asset. In fact, this may not always be. For example, the company can buy securities at a high price and stand on them in a low period when it seems to decrease in Val, just sell them at a higher price later.

In the economic crisis, which occurred in 2008, several economists proposed that Mark to Market Accounting plays a major role. AppearanceM that banks were forced to write assets such as mortgages secured securities and loans, their "value" seemed to fall in the eyes of investors and create panic. If Mark were not used for market accounting procedures, some economists believed that failing banks could survive because they would not be forced to write their value dramatically in quarterly reports.