Glossary

Mark to market

Mark to market values an asset at today's market price rather than what you paid — keeping accounts current, but introducing swings when markets move.

2 min read

Value at market priceNot cost

Reflects present valueAdds volatility

Definition

Mark to market restates an asset or liability at its current market value each period, rather than holding it at historical cost. Gains and losses flow through as the market moves.

In plain terms

Instead of "what we paid", the books say "what it is worth now". Honest, but it means value can swing up and down with the market.

Why it matters for your company

Mark-to-market applies mainly to financial instruments and can trigger a margin call on leveraged positions. For most trading companies, historical cost still dominates. See fair value.