mark-to-market accounting

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June 11, 2026

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Mark-to-market (MTM) accounting is a method where assets are revalued annually based on their current market prices, typically at the end of the fiscal year. This revaluation determines the taxable income or loss, even if the asset has not been sold.1

MTM rules are applied in specific situations, such as for regulated futures contracts and certain exchange-traded options, or when elected by traders. It differs from phantom income, which arises from recognizing income as it accrues rather than when cash is received, even if the asset itself isn't fully revalued annually. MTM accounting can create a situation where taxes are owed on income that has not yet been realized through a sale, requiring funds to cover the tax liability.1

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Enron scandal
Downfall and bankruptcy
…a technique known as “mark-to-market accounting,” to hide the troubles. Mark-to-market accounting allowed the company to write unrealized future gains from some trading contracts into current income statements, thus giving the illusion of higher current profits. Furthermore, the troubled operations of the company were transferred to so-called special purpose…
Read More
…a technique known as “mark-to-market accounting,” to hide the troubles. Mark-to-market accounting allowed the company to write unrealized future gains from some trading contracts into current income statements, thus giving the illusion of higher current profits. Furthermore, the troubled operations of the company were transferred to so-called special purpose…
Read More