Fair value accounting ' sometimes used interchangeably with mark-to-market accounting ' has been criticized in some quarters as being the main cause of the current credit market turmoil.
Fair Value Accounting: Insights and Issues
This article examines the accounting principles and the framework underlying fair value measurements and clarifies the difference between mark-to-market accounting and fair value accounting. The article then examines the application of fair value accounting in inactive or illiquid markets, and in doing so, raises certain thematic issues that have surfaced in regard to this topic.
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