Mark-To-Market Losses


DEFINITION of 'Mark-To-Market Losses'

A loss generated through an accounting entry rather than the actual sale of a security. Mark-to-market losses can occur when financial instruments held are valued at the current market value. If a security was purchased at a certain price and the market price later fell, the holder would have an unrealized loss, and marking the security down to the new market price results in the mark-to-market loss. Mark-to-market accounting is part of the concept of fair-value accounting which attempts to give investors more transparent and relevant information.


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BREAKING DOWN 'Mark-To-Market Losses'

For example, if a company holds securities that they bought as an investment and the market value of the securities fall, then once they assign the new market value to their asset they would take a mark-to-market loss on their holding even if they didn't sell it. Mark-to-market attempts to give investors a more accurate picture of the value of a company's assets.

  1. Security

    A financial instrument that represents an ownership position ...
  2. Capital Loss

    The loss incurred when a capital asset (investment or real estate) ...
  3. Accounting

    The systematic and comprehensive recording of financial transactions ...
  4. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  5. Mark To Market - MTM

    1. A measure of the fair value of accounts that can change over ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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