cer, page-23

Hi CT,

Thanks for the comments.

Yes mark to market from my limited understanding has relevance in a normal market, but when the market is abnormal the issue becomes extremely complex. For example, valuations at give-away prices are mostly meaningless unless you really are going to sell them. One problem I think it would create is lowering assets thereby reducing Balance Sheets and models that reflect this new value in share prices. The diminishing values and share prices feed off each other.

Another aspect would be reducing V in the LVR ratio thus increasing L. Can you imagine the number of global companies that would be breaching their debt covenants by slashing asset prices???

It is a very complex situation that almost demands a new (or amended) accounting model imo.

Cheers, Pie :)