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| Subject: mark-to-market Mark-to-market or fair value accounting refers to the accounting standards of assigning a value to a position held in a financial instrument based on the current fair market price for the instrument or similar instruments. Fair value accounting has been a part of US Generally Accepted Accounting Principles (GAAP) since the early 1990s, and investor demand for the use of fair value when estimating the value of assets and liabilities has increased steadily since then as investors desire a more realistic appraisal of an institution’s or company’s current financial situation. Mark-to-market is a measure of the fair value of accounts that can change over time, such as assets and liabilities. It is the act of recording the price or value of a security, portfolio or account to reflect its current market value rather than its book value. For example, mutual funds are marked to market on a daily basis at the market close so that investors have an idea of the fund’s net asset value (NAV). (Wikipedia Jan 2010) Post Modern Security Analysis By John Schroy, on March 20th, 2009 |  Leave a comment  The Crash of 2008 revealed serious flaws in the rating agency system. The market had lost confidence in the major agencies because of the practice of selling ratings. Also, ratings had become a condition of default and agencies, to look good, rapidly downgraded issues just prior to default. Reform of this system is not simple, requiring an entirely new approach consistent with the complexity of today’s market. Collaborative research with new Internet technology is a possible solution. March 20th, 2009 | Print Article |  Email Article |  Topics: Capital Market Wiki, collaborative research, complexity, mark-to-market, Post Modern Security Analysis, rating agencies, Sarbanes-Oxley Act, Security Analysis | Category: US SEC | Leave a comment |  Short url'Defined Benefit' Pension Plans By John Schroy, on February 26th, 2006 | Leave a comment  The sponsors of ‘defined benefits’ pension plans controlled, as of December 2004, about US $2.5 trillion in equities. Common stocks, even after the crash of 2000-2001, were substantially over-valued. In order for stock prices to reflect values that were customary before the advent of stock buybacks, prices would have to drop between 20% (earnings basis) and 50% (dividend yield basis). In the case of ‘defined benefits’ pension plans, this would represent a loss of between US$500 billion and US$1.2 trillion in market value of pension portfolios. February 26th, 2006 | Print Article | Email Article | Topics: Baby Boomers, capital flow analysis, defined benefit pensions, dividends, FASB, FASB Rule 132R, FASB Rule 151, mark-to-market, pension fund, pension plans, SEC Rule 10b-18, Total Returns, US SEC | Category: Stock Buybacks, featured | Leave a comment | Short urlFeatured articles on inside pages
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