this is the absolute bottom..., page-63

s174, mark to market is flawed and the changing of it may help iron out some of these flaws. its not to say that it be scrapped because as you rightly point out the market needs to know the fair value of the assets but they also need to take into account the liklihood of the assets potentially being impaired and the disadvantages & advantages of value an asset at one point in time.

also, its not just about toxic assets and houses like Barnsty & yourself have referred in your discussions. mark to market come into play with commercial properties, credit deriatives, CDO's, deferred tax assets etc etc. i mean how do you value a train, a motorway, CDOs when there are simply no buyers yet the possibility of default on the loans may not be a problem. This can cause the need to raise capital when it simply doesn't need to happen.

Standard & Poors recommends the cost model with inclusion of mark to market standards when the possiblity of impairment is significant. I would suspect the critics of changing mark to market standards like me don't trust the banks and regulators to correctly disclose and enforce the judgement of when the possibiliy of impairment is significant.
I would prefer some type of rolling average model over say a 2 or 3 year period which would eliminate any blimps either up or down and if the trend in values is either up or down it will over a period of time resemble a closer picture of fair value.