Market marking can provide a more accurate figure of the present value of a company’s assets based on what the company can get in exchange for the asset under current market conditions.
However, in adverse or volatile times, the MTM may not accurately reflect the true value of an asset in a normal market.
Mark-to-market is an alternative to historical cost accounting, in which the value of an asset is maintained at the level of the original purchase price.
When trading futures, the accounts in futures contracts are recalculated daily according to the market. Profit and loss is calculated between long and short positions.