The top management of the company Enron had decided to shift the company from the conservative historical cost accounting method to the mark to market accounting method, popularly known as the MTM approach. For instance, it must be noted that while the gas was one of the chief commodities in the energy trading business, the valuation of the same was complex because of the unavailability of the quoted price, which is necessary for valuation. Following the mark to market approach, the management of the entity would adjust the fair values