http://www.sec.gov/spotlight/fairvalue.htm portfolio into two categories, as we do in the security portfolio. The object of mark to market accounting is to recognize value immediately instead of waiting for the asset to sell. So instead of taking a sizable loss when the asset is sold, most of the loss is already recognized. The whole premise of mark to market accounting for loans is entirely flawed. It assumes that assets will be sold at a loss. When a bank has a mortgage loan that has been impaired, it is now required that the financial institution write down the collateral to market. In this current market, where real estate values have tumbled, valuations are all over the board. There are many distressed sales where there have been forced liquidations. However, these distressed sale prices are not indicative
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