Understanding MTM

MTM (Mark-to-Market) is a financial accounting method used to revalue assets and liabilities at their current market value. Unlike historical cost accounting, MTM provides a real-time snapshot of an organization’s financial position, enabling accurate and informed decision-making.

MTM is commonly applied in:

1. Trading: To evaluate the profitability of trading activities.
2. Investment portfolios: To analyze portfolio performance amidst market fluctuations.
3. Contracts: To assess financial outcomes impacted by changing market prices.