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Corporate Reports | Mark-to-Market Accounting

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Added on  2019-11-19

Corporate Reports | Mark-to-Market Accounting

   Added on 2019-11-19

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Running head: CORPORATE REPORTSCorporate ReportsName of the StudentName of the UniversityAuthor’s Note
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1CORPORATE REPORTSTable of ContentsPart 1................................................................................................................................................1Part 2................................................................................................................................................8
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2CORPORATE REPORTSPart 1Executive SummaryThe main objective of this report is to analyze and evaluate different aspects of Mark-to-MarketAccounting. The first part of the study involves in the evaluation of the benefits of adoptingmark-to-market accounting in the companies. In the next part of the report, the risk involved infor the companies in the adoption of mark-to-market accounting is discussed on a detailed basis.After that, the last part of the report evaluates the usefulness of mark-to-market accounting mark-to-market accounting in the reporting of the values of various assets and liabilities of thecompany in the financial statements.
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3CORPORATE REPORTSIntroductionMark-to-market accounting refers to the process of determining the fair value of thecompany’s assets and liabilities based on the market price of those similar assets and liabilities.On a more specific note, mark-to-market is the reasonable value of an asset or liability that variesover the period depends on the market value of that assets and liability (Ball, Jayaraman andShivakumar 2012). Most of the business organizations all over the world use mark-to-marketaccounting as an accounting tool in the process of recording the value of an assets or liability inrespect to the current market prices of that asset or liability. Thus, based on the above discussion,it can be seen that there are some major advantages of mark-to-market accounting. It also needsto be mentioned that there are also some disadvantages of mark-to-market accounting. All theseaspects are discussed below.Benefits of Mark-to-Market AccountingIt can be seen that most of the companies all over the world have adopted the mark-to-market accounting process for the valuation of their assets and liabilities. The major reason of theadoption of mark-to-market accounting is that the companies get many benefits from theadoption of mark-to-market accounting. The major benefit of mark-to-market accounting for thebusiness organizations is that it helps in the process to keep the financial statements of thecompanies more realistic. This is done by measuring the values of the assets and liabilities of thecompanies on the fair value basis. For this reason, the financial statements of the companies areable to reflect the true financial position of the companies’ and the stakeholders and investorscan actually judge whether the financial position of the company is in danger or not. Anothermajor benefit of mark-to-market accounting is that it helps the companies from over-extending
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