A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from July 05, 2011
Mark-to-Unicorn Accounting (imaginary mark-to-market accounting)

Entry in progress—B.P.

Wikipedia: Mark-to-market accounting
Mark-to-mark or fair value accounting refers to accounting for the fair value of an asset or liability based on the current market price of the asset or liability, or for similar assets and liabilities, or based on another objectively assessed “fair” value. Fair value accounting has been a part of Generally Accepted Accounting Principles (GAAP) in the United States since the early 1990s, and has been used increasingly since then.

Mark-to-market accounting can change values on the balance sheet frequently, as market conditions change. In contrast, historical cost accounting, based on the past transactions, is simpler, more stable, and easier to perform, but does not reflect current fair value at all. It summarizes past transactions instead. Mark-to-market accounting can become inaccurate if market prices change unpredictably. Buyers and sellers may claim a number of specific instances when this is the case, including inability to accurately collectively value the future income and expenses, often due to unreliable information, over-optimistic, and over-pessimistic expectations.

Investopedia
What Does Mark To Market - MTM Mean?
1. A measure of the fair value of accounts that can change over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of an institution’s or company’s current financial situation.
2. The accounting act of recording the price or value of a security, portfolio or account to reflect its current market value rather than its book value.
3. When the net asset value (NAV) of a mutual fund is valued based on the most current market valuation.

The End of Civilization
Amateur economist dictionary update
Posted: June 28, 2010 by hpx83 in Humour
“Mark-to-unicorn” = Policy for valuation of risky assets assumed by the entire world in late 2008. Includes lofty estimates of the price of junk and possibly drawing some fantasy-critters on the official balance sheet reports.

Business Insider
Gossip Grind: Today’s Wall Street Buzz In 60 Seconds
Vince Veneziani and Courtney Comstock | Jun. 29, 2010, 1:33 PM
Bonus Round: There’s a new form of accounting out you may not have heard of yet. It’s called mark-to-unicorn. “Includes lofty estimates of the price of junk and possibly drawing some fantasy-critters on the official balance sheet reports.”

Bogleheads
EO 11110
Posted: Thu Jul 01, 2010 9:44 am
good point. and i would add - how much is still overvalued? mark to market was replaced with mark to unicorn

Seeking Alpha
Time to Short the Banks: Pros, Cons and Ramifications
by: Cliff Wachtel October 19, 2010
(...)
COMMENTS
ain’t no fortunate son
19 Oct 2010, 09:24 AM
One of the many things that have been conveniently forgotten, and not by accident, is that the “Too Big To Jail” bank balance sheets are a disaster when you consider that the only two things keeping them “solvent” are the repeal of FASB Rule 157 Mark to Market and massive stealth monetization of Treasuries by the FED via POMO’s that have pumped hundreds of billions of new dollars onto the bank balance sheets. They can carry these “assets” (GOD I love the irony in that word) at basically any ridiculous level they want to… many now call this specious accounting methodology “mark to fiction,” or “mark to unicorn.” The change came about in early 2009 when the Congress let itself be pressured (dare I say bribed?) by the ABA big bank lobby to force FASB to make the change… it was part of the old cold war inspired MAD (Mutual Assured Destruction) ruse that the banks were running on a naive new president through the pressure to continue the bailouts and push through QE that led to Obama’s exit from the big meeting in early March ‘09 saying he thought the market was a “buy.”

Investors Hub
alien-IQ
Monday, October 25, 2010 9:24:24 PM
Buffet Loves Mark to Unicorn accounting

The End of Civilization
Mark-to-unicorn: The systemic insolvency of the entire US financial system
Posted: January 15, 2011 by hpx83
Many people think that the bailouts, the money printing and the shenenigans by the US Federal Reserve and the US Treasury Department is what stopped the fatal decline of ’08. Many people think that “oh wow, it sure was ugly but at least they did the largest stick save in financial history”. Yet this is completely nonsense. What most people have missed, and indeed more commentators at the time should have vomited in public places over is the ending of mark-to-market practices, or rather the “Enronification” of the entire US financial system. Basically, assets on the balance sheets of financial institutions are now set at whatever value the bank feels like. Banks do not go bankrupt until incoming cashflow is to small to cover outgoing payments.

Posted by Barry Popik
New York CityBanking/Finance/Insurance • (1) Comments • Tuesday, July 05, 2011 • Permalink


Goodness. Even reading this article twice through, I still haven’t the slightest idea what mark to market accounting is. Does it fall under another accounting specialty?

Posted by Emily Blake  on  07/23  at  11:50 AM

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