A contract involving a financial obligation that represents a monetary asset to one party and a financial liability or equity instrument to another party. Examples include stocks, bonds, loans, and derivatives.
An important accounting practice designed to manage the impact of volatile financial instruments on a company's profit and loss account through the use of financial derivatives to hedge against risk.
Marking to market, also known as fair value accounting, is the practice of valuing financial assets and liabilities according to their current market prices. It is a commonly applied method in accounting and finance but remains controversial due to its impact on financial statements.
