What problems has mark-to-market accounting caused?
Some companies have had to take writedowns on assets that might easily recover in value by the time the firm is ready to sell them. This may have contributed to the collapse of some U.S. financial institutions, which had to take huge writedowns that decimated their balance sheets. Market watchers also say the mark-to-market rules contribute to short-term thinking among corporate executives. Recently, U.S. and Canadian regulators have tinkered with some rules to give banks and other companies more flexibility, especially where frozen markets have made valuing assets difficult. What are the risks for holders of GMAC bonds, especially if General Motors were to file for bankruptcy protection? GMAC LLC is the former finance arm of General Motors Corp. (GMAC is short for General Motors Acceptance Corp.) But it is now only 49 per cent owned by the car company, with 51 per cent held by a consortium led by private equity firm Cerberus Capital Management LP. As a result, if General Motors alone
