Mark-to-market 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.^{[citation needed]} 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.^{[citation needed]}

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 both accurately and collectively value the future income and expenses, often due to unreliable information, over-optimistic, and over-pessimistic expectations.^{[citation needed]}