Mark-to-market accounting is all about the accounting standards of assigning a value to a position held in a financial instrument based on the current fair market price for the instrument or similar instruments. It was originally practiced in the early 1990s. Under mark-to-market accounting, the use of fair value measurements has increased steadily over the past decade, primarily in response to investor demand for relevant and timely financial statements that will aid in making better informed decisions. To understand the original practice, consider that a futures trader, when taking a position, deposits money with the exchange. This is intended to protect the exchange against loss. At the end of every trading day, the contract is marked to its present market value. According to wikipedia's website, if the trader is on the winning side of a deal, his contract has increased in value that day, and the exchange pays this profit into his account. On the other hand, if the market price of his contract has declined, the exchange charges his account that holds the deposited margin. If the balance of this account falls below the deposit required to maintain the position, the trader must immediately pay additional margin into the account to maintain his position.  However, when mark-to-market accounting method became widely popular, corporations and banks seem to have figured out that this was a tempting way to commit accounting fraud, especially when the market price could not be objectively determined (because there was no real day-to-day market available or the asset value was derived from other traded commodities, such as crude oil futures), so assets were being 'marked to model' in a hypothetical or synthetic manner using estimated valuations derived from financial modeling, and sometimes marked in a manipulative way to achieve spurious valuations. The real example is Enron. By adapting the mark-to-market accounting, Enron recorded gains from its future investment. However, the investments, which mostly were based overseas, turned out to be losses. Thus, the gain of profit was a fake gain after all. Overall, the practices of mark-to-market accounting can be seen as an opened field in financing sources. It needs to be regulated and controlled more carefully.