MARK-TO-MARKET LOSSES

A generated losses from a decline in market price. This happens through an accounting entry, not on the actual sale of a security. If a financial instrument was bought at a specific price but the market price fell later, the security holder would have an unrealized loss like in paper losses; thus, marking down the price of the security leads to mark-to-market loss. Part of the fair-value accounting concept, it attempts to give market makers broader and relative information.