How do you mark to market?

Understanding the mark-to-market meltdown

Credit valuations service sector heats up

What is fair value? Financial Accounting Standard 157 is quite prescriptive, defining it as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement dates”.

FAS 157 puts in place a framework for fair value measurement and disclosure. Perhaps the most important feature in FAS 157 is the requirement to set out financial statements in three levels that describe the reliability of the inputs used to establish fair value.