Mark-to-market is an accounting practice that involves valuing an asset or liability based on its current market price rather than its book value. This method provides a more accurate reflection of an entity's financial position by updating the value of assets and liabilities to their fair market value, thus influencing financial reporting and decision-making. Mark-to-market is particularly relevant in situations where assets are subject to significant price fluctuations, such as cash flow hedges and net investment hedges.
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