What are the advantages of MTM?
A number of advantages come with MTM, such as increased transparency, better risk management, and a precise representation of a company’s finances. Stakeholders can make informed decisions based on the true financial health of the company by valuing assets and liabilities at their current market value. MTM adjusts asset/liability values to current market rates, showing real-time financial health. In investments, MTM impacts mutual funds daily and futures contracts may need cash adjustments. Drawbacks of MTM include potential overvaluation in booms and rapid devaluation in downturns.