Abstract
<p class="MsoNormal" style="text-align: justify; line-height: normal; margin: 0in 0.5in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt;">According to the financial press the recent financial problems of many firms is at least partially due to mark-to-market accounting.<span style="mso-spacerun: yes;">&nbsp; </span>In this paper I ask the question -- if mark-to-market accounting is the reason for the financial distress of firms, why does the FASB require mark-to-market?<span style="mso-spacerun: yes;">&nbsp; </span>I review accounting standards that require mark-to-market accounting and empirically test the relation between firm value and mark to market adjustments to provide evidence as to whether mark-to-market adjustments are useful to investors and creditors.<span style="mso-spacerun: yes;">&nbsp; </span>The results provide evidence that mark-to-market adjustments impact firm value.</span></p>
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have