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Accounting Rule: Mark the Market


Grimm74
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Does anyone have links to some sites that expand on this accounting rule? I've heard from a few folks that it is a federal regulated accounting rule that was birthed from Enron, and a lot of economists blame this rule for our current economic problems. In fact the European Union was very much against the US adopting it.

Edited by Grimm74
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However, the SEC is pretty much requiring our publicly traded companies to start adopting more international accounting standards ... a HUGH component of that is mark to market ... for EVERYTHING.

 

What's the market price of that stapler? What's the market price of the parking lot outside the building you own? What is the market price of the microwave oven in the break room? What is the market price of the accounts receivable from Mr. Mack's Dry Cleaning and Mud Wrestling Emporium?

 

...mark to market accounting is fine for liquid assets...illiquid assets, not so much...

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