A Study on the Differences between Historical Cost Accounting And Marking-to Market
in Accounting for investments.
Wan Azmimi Wan Mohamed.
Submitted in Partial Fulfillment of the Requirements for the Award of the Degree of M.A.
in Accounting and Financial Management.
1994/1995
f erpustaVs-i
n*t^n Pcmbacm
' i j "azsk
laugor Das a-
TSDA-K DISENA
Abstract.
This dissertation is a study of the differences between historical cost accounting and
marking to market in accounting for investments. Here we look at the reasons for the
emergence of marking to market and the advantages that this method has over historical
cost accounting. In understanding the differences between the two concepts a specific
example is looked into i.e. investment. Then we look at the impact that the two methods
have on financial statements, and finally, an evaluation of the development of marking to
market.
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Acknowledgments.
I would like to thank my supervisor Mr. Tony Arnold for his supervision,
guidance, time and unfailing support throughout my dissertations. My gratitude also goes
to my family and friends for their encouragement and support during my study.
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CONTENTS
page
INTRODUCTION
1
1. 0
MARKING TO MARKET : THE EMERGENCE AND THE
DEFICIENCIES OF HISTORICAL COST ACCOUNTING.
1.1
Introduction.
7
1.2
What is historical cost accounting?
7
1.3
What is marking to market?
9
1.4
The emergence of marking to market.
14
! .5
Advantages of marking to market as compared to
historical cost accounting.
16
1.6
Summary and Conclusion
19
2.0
INVESTMENT VALUATION AND TREATMENT : A SPECIFIC
EXAMPLE.
2.1
Introduction
2i
2.2
Definition of Investment.
23
2.3
Valuation of Fixed Assets Investments.
25
2.4
Valuation of Current Assets Investments.
27
2.5
Discussion on the Valuation and Treatment.
29
2.6
Conclusion.
34
3.0
MARKING TO MARKET: ITS IMPLICATION AND FUTURE
DEVELOPMENTS.
3.1
Introduction.
35
t
3.2
Functions and the purposes of financial reporting
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35
3.3
Implications and the future developments.
40
3.4
Summary and Conclusion.
46
CONCLUSION.
48
REFERENCES
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Ill
LISTS OF ABBREVIATIONS
ASC
Accounting Standards Committee.
MVA
Market Value Accounting,
HCA
Historical Cost Accounting.
FASB
Financial Accounting Standards Board.
CPP
Current Purchasing Power.
SSAP
Statement of Standards Accounting Practice.(issued by the ASC)
GAAP
Generally Accepted Accounting Principles.
RCICAS
Research Committee of the Institute of chartered Accountant's of Scotland.
ED
Exposure Draft.
CA
Company's Act.
IAS
International Accounting Standards.
ASB
Accounting Standards Board.
SFAC
Statement of Financial Accounting Concepts.
SEC
Securities of Exchange Committee
NRV
Net Realisable Value.
SFAS
Statement of Financial Accounting standards.(issued by the FASB)
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INTRODUCTION
Historical cost accounting has been the principal methodology of accounting over
several centuries. The reason for its survival is because it is considered to be more
objective than any other method, in that it records what actually happens at least as far as
the acquisition of assets is concerned. The concept of market value accounting or marking
to market, on the other hand is not a new phenomenon. Its use has long been established
where under the principal of conservatism, the use of historical cost has been allowed to be
modified in certain cases where "current market value is lower than cost". This can be seen
in the case of fixed assets and stocks.
However, in recent years, there has been increased interest in the disclosure by
financial institutions of the market values of their financial instruments, either as substitutes
or complements for historical book values (Berger et. al, 1991,p.753). They considered
that the disclosure of well-defined and accurately measured market values could improve
the effectiveness of market and regulatory discipline. The most important consideration is
that, to the extent that market value can improve the measurement of capital, it can allow
for more timely supervisory action (including closure) concerning institutions whose
capital is impaired. It has often been claimed that the use of GAAP or historical cost
accounting (HCA) has hindered supervisors in recognizing or closing insolvent institutions
on a timely basis (Berger et.al.,199!,p.753).
Morris and Sellon (1991,p.5), also suggested that the interest in market value
accounting is largely motivated by changes in the financial markets over the past decade,
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where, in an environment of greater interest rate volatility, the current accounting system
does not provide good measurements, especially in a financial sector environment.
In the case of investments, the marking to market approach has recently been of
interest in the financial services sectors as well as the banks, which deal a lot with
investments. The Accounting Standards Committee in July 1990, published its ED 55 on
the subject of investments where the purpose was to set general rules for accounting for
investments -which can be applied to ail enterprises, although it recognised that particular
industry sectors may require
guidance for their own circumstances. ED '55 in its
recommendation states that readily marketable investments held as current assets should be
marked to market and that for fixed asset investments, the choice is given to companies.
Also, in the United States, the Financial Accounting Standards Board (FASB), issued a
Statement of Financial Accounting Standards Number 115 in May 1993 which requires
that investment securities be valued using market interest rates and that the equity
accounts to be adjusted to reflect the changes in these market values.
The argument for using current values has always been at its simplest and
strongest in the case of listed investments. MacNeal (1939), set out clearly the dangers of
manipulation and non-comparability of profits from period to period that arise if
investments are carried at cost (or even " lower of cost and market"), since managers are
free to choose which investments to sell from the portfolio in order to report a desired
pattern of realized profits ( Macve and Jackson, 1991, p.10). Given Stock Exchange
quotations, there is also relatively little difficulty in obtaining appropriate current values for
listed investments, as compared with most business assets. However, this may not be a
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simple matter in the case where the market price is not readily available, because
management can then manipulate the numbers reported.
Historical cost accounting and marking to market affect the financial statements
both on the balance sheet and when reporting profits. This is so as marking to market and
historical cost have different ways of recognising the gains or losses as a result of higher
or lower market values reported on such assets. This is an important aspect because now
there is a move concerning financial statements towards user's orientations and not
producing item merely for stewardship purpose. In fact, according to the
Research
Committee of the Institute Chartered Accountant of Scotland (RCICAS), Solomon's
guidelines and the Statement of Financial Accounting Concepts (SFAC) Number 1, they
recommended that financial statements should reflect economic reality and that, in order
to be more valuable, financial statements should be prepared to emphasize the economic
substance of transactions rather than legal form.
Several proposals have also been advanced to increase the use of marking to
market accounting and these proposals range from partial approaches to more
comprehensive programmes. The industries that have adopted this approach are mainly the
financial services and in particular banks that deal a Sot with investments although the
Research Committee of the Institute of Chartered Accountant's of Scotland, in their
proposals, prefers comprehensive rather than partial marking to market accounting.
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RESEARCH PROBLEM
The purpose of this research is to study the differences between the "historical
cost accounting" and "marking to market " approaches in accounting for investments. The
reason for doing the study is to understand in more depth the problems surrounding
historical cost accounting in valuing investments and to see to what extent the concept of
valuing investments using the
marking to market approach has or is
important role in financial reporting.
I will also be looking at
becoming an
the reasons for the
emergence of the "marking to market" concept and evaluating the pros and cons of
adopting such a system. The impact and the future developments of the use of this
accounting method to the economy as a whole
wil! also be investigated, using the
literature relating to the two concepts.
METHODS AND METHODOLOGIES.
This section describes the methods and methodologies used for my intended
research. Chua (1986) developed three approaches in which social theory can be analysed.
Under her framework , I think it is reasonable to categorise the research that I will be
doing as falling under a mixture of the critical and interpretative approaches.
In
my research, there are two main aspects that I will be looking at i.e. the
comparative and the historical perspectives. I will be reviewing the concept of historical
cost accounting and the marking to market approach and, in doing so, I will focus on
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"investments" as a specific example. "Comparative" is used here because I will be looking
at two situations and studying them in order to determine and explicate their likenesses
and differences, where here the two approaches to valuing investments, i.e. historical cost
accounting and marking to market, are compared. According to the critical approach,
theory is seen as a result of a process which is being studied through time and is changing
from time to time that depends on
social practices. By looking at the historical and
marking to market approach I will also be looking at the movement from one method to
the other, which is in line with critical approaches.
The historical aspect is also covered in that I will be looking into the history of
the emergence of marking to market from historical cost. Here I will be looking at the
inadequacy of the historical cost method and comparing some criticisms of the historical
method with the marking to market approach.
I can also view my study as an interpretative approach especially when trying to
understand the reasons for using a particular method. If we look at the interpretive
perspective, they believe that actions are directed towards the achievement of a determined
goal and the study will be
interpretive in explaining the reasons behind the use of
particular methods.
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OUTLINE OF THE CHAPTERS.
In order to approach the subject the outline of my research will be as follows:
Chapter 1
In this chapter I introduce the concept of "marking to market". The historical cost
accounting method is compared and evaluated against the "marking to market" approach.
The emergence of "marking to market" is also explained and discussed.
Chapter 2
This chapter looks at "investment" as a specific example in comparing between the
two methods. Here, the treatment and valuation of investments will be discussed and
evaluated.
Chapter 3
Here, I will first discuss the functions and purposes of financial reporting. Then, the
implications of using these two methods for financial reporting will be discussed, followed
by the future developments of the concept.
Conclusion
This will summarise the findings of each chapter and also provide an overall
evaluation of the studv.
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CHAPTER 1
MARKING -TO-MARKET : ITS EMERGENCE AND THE
DEFICIENCIES OF HISTORICAL COST ACCOUNTING,
1.1
INTRODUCTION
Fn this chapter the concept of marking -to-market will be introduced. In doing so I
will first explain what historical cost accounting is, so as to distinguish it from marking-tomarket. Then, the reasons for the emergence of marking-to-market wil! be discussed
followed by the identification of the advantages of marking-to-market as compared with
historical cost accounting.
1.2
WHAT IS HISTORICAL COST ACCOUNTING ?
Historical cost accounting is a method of reporting assets and liabilities at their
original price. It has been the principal methodology of accounting over several centuries.
One important element of historical cost which has helped it survive for so long is because
it is considered to be more objective than any other method, in that it records what actually
happens. As the name implies, historical cost means past costs.
Ijiri (1971, p. 14) states that historical cost valuation provides data that are usefu!
for decision making by insightful managers and investors insofar as history is the only basis
for predicting the future. However, one can argue that it is not the only method for
valuation. In fact, MacNeiU (1971,p. 18) in response to this argument, states that we have
to recognize that historical events occurred under conditions that were unique to that
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time, and future conditions must be reckoned with. However, the fact that the value
however defined of an asset has changed since its acquisition is history. It just happens
that under present accounting practices', the change in value is generally not recorded
history.
In practice, the principle of conservatism has been applied so strongly that it has
been allowed to modify historical cost in certain cases where current market value is lower
than cost. In the United Kingdom, the valuation rule for current assets such as stocks and
work in progress is, in conventional accounts, 'cost or current market value, whichever is
the lower/ For fixed assets of limited life, depreciation is traditionally written off the
historical cost of the asset over its lifetime. Provision is also made for writing down the
book value of fixed assets where there has been a permanent dimunition in value below
historical cost. The estimation of depreciation reduces the objectivity of historical cost
valuation, as does the introduction of lower market value, thus diminishing one of the
important advantages claimed for historical cost.
The concern for income measurement in financial reporting, is also another factor
which has an effect on the historical cost method. This is because financial reporting is no
longer purely for stewardship" purposes but has moved towards a user-orientation which
has had two main consequences. First, the idea that accounting information should be
related to the decisions which users will make which, since decisions are made in the
1
However, it is noted that for assets which are physically deteriorating, the amount of depreciation which
is charged to the profit and loss account, goes some way towards identifying the change in value. This,
however, reduces the objectivity of historical costwaccounting.
^The traditional function of financial reporting is stewardship, which looks to the board of directors who
are responsible for the management of the company's assets to give a periodic account to the proprietors
(the shareholders) of how they have carried out this function.
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present and relate to the present or future, has created dissatisfaction with historical cost
as a valuation base. Secondly, the recognition that there is a variety of users and uses, each
of which might have different information requirements, which might raises the possibility
that there might be a conflict of interest between users whose information needs differ thus
affecting 'general purpose' sets of financial acounts.
The
use of historical cost as a measurement cannot give fully up to date
information about a company's results and financial performance especially in times of
changing prices (Accounting Standards Committee, 1986,p.9). While the ASC do not
assert that historical cost accounting is " wrong" they do believe that it has serious
limitations. The volatility of interest rates in the environment, rapid changes in rates of
inflation and the changes in specific and general price has resulted a perception that
financial statements do not fulfill investors needs and as such has prompted users of
information to want more than which is being offered.
1.3
WHAT IS MARKING-TO-MARKET ACCOUNTING?
The idea of "marking to market" stems from the fact that historical cost alone is
not sufficient. Fair value, mark to market, and market value accounting often are used as
synonyms (Barth, 1994,p3). Before looking at the emergence of marking to market, it is
important to understand its concept and meaning.
Market Value Accounting(MVA), according to The New Pelgrave Dictionary of
Money and Finance (1992, p672), is the practice of assessing a financial asset at its present
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value, or the amount at which it could be traded in an efficient market (See also Shaffer,
1994, p 14). It was also stated that MVA is also called ' marking to market'. Based on
this definition the two terms i.e. marking to market and market value accounting can be
used relatively
interchangeably. The above definition of market value accounting hinges
on two things, that being present value and amount at which it can be traded. Defining
marking to market as the amount at which financial assets could be traded, leads us to the
question of whether marking to market, MVA and net realisable value really are the same
concepts. How do these concepts differ (if at all) and is one concept a special version of
the Other.
•
• p y i . j V ^ n £ P e i k - h ^ m c t a n Peir.baca
40 i5'> Mi 3" A i a m
C g j a n g n r Daiul Ehsao.
Net realisable value, exit pricing and market selling price based valuation are three
cxpresssions that can be used interchangeably. These methods of pricing fall under the
current value based accounting methods which are mainly intended to provide information
that is up to date. It was noted that the advocates of current value accounting generally
agree that historical cost accounting is not satisfactory but do not agree on which method3
(of current value accounting) to use.
Net realisable value/ exit price is an intuitively appealing valuation basis . Tweedie
(1977) refers to net realisable value as an "intuitive concept" and reports an empirical
study which support this view. NRV in this sense can be defined as the amount of money
for which an asset can be exchanged in the market place (NRV being selling price less
selling costs). However, when using market value accounting, this does not necessarily
mean or assume that the selling price will actually be used but it is more a way of
TiOAK BlKNAHKAN
Replacement cost is another method of current value.
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11
identifying the present worth of the assets. The idea of net realisable value is based on the
price of which the assets can fetch in the market, and net realisable value has been
criticised on the grounds that its use is based on the assumption that the entity or its assets
are to be liquidated. The life of the business it is claimed is implied to be definite rather
than indefinite, which is in conflict with the going concern concept.
The idea of net realisable value, marking to market or market value accounting, is
instead simply to base the value of assets and liabilities to a price which is relevant to the
present on the grounds of economic reality and consistency (Macve and Jackson, 1991, p.
27). There is no precondition of emphasizing enterprise survival when dealing with the
market based approaches nor do they require the business to be in a state of liquidation,
because only individual assets are valued at market price and not the business as a whole.
If a liquidation is to take place, goodwill would be valued as an asset too, but ordinary
financial reports do not include goodwill unless it has been acquired in the past.
According to Lee (1981), the use of NRV emphasises the condition of enterprise
survival because the focus is on the availability and accessibility of cash for future activity
and needs. This method reflect the alternative resource form; i.e. what the entity would
have in the form of cash if its existing resources were realized in an orderly manner, where
this information is useful in because it underlies a vital economic decision ; should the
entity continue in its existing form or would it be better off in an alternative form. Cash,
current cash equivalents and cash flow are matters which appear to
underlie most of the
decision models to which financial reporting is directed : for example, shareholders are
concerned about dividends, lenders, bankers and creditors are concerned with interest and
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12
capital repayments and employees are interested with wages and security of empioyment
(Lee, 1981, p. 164).
For net realisable value to be in operation and to be reasonably accurate, there
must exist a second-hand market for the assets. However, to have a second-hand market
for all assets is a factor that may not always be practical, although in some cases market
values can be calculated by using a theoretical valuation model (e.g. for options) based on
either an original pricing formula or by calculating the net costs and benefits which would
arise if position being revalued were closed. As such the use of market value accounting
can be extended further and not just limited to situations where actual market prices are
available.
The benefits of using NRV relate to its use of an indicator of an important
opportunity facing the firm, that of disposing of the assets. Chambers refers to this as the
current cash equivalent of an asset, and correctly emphasizes that this is a relevant value
in making a wide range of decisions and appraisals. Edwards and Bell ascribe similar
merits to net realisable value, which involves the construction of balance sheets by means
of estimated current market prices, " values that could currently be realized if the asstes
were sold at the best prices immediately available" (1961,p.79), by describing it as an
opportunity cost although in doing this they may be over stating its merits: opportunity
cost uses the best alternative revenue forgone, whereas net realisable value has been
argued to represent one of several alternatives which may represent the best.
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13
The proponents of NRV do not want to identify disposal as an opportunity so
much as the opportunity cost of retaining the asset (i.e. the amount that it could have been
sold for). However, it can be argued that whether the assets are sold or retained the
opportunity cost of it is still there; if the asset were disposed of, the opportunity cost
would be the revenue forgone from using them, whereas if the assets were retained the
opportunity costs would be the amount that would have been received from disposal.
Also, it has been claimed that
net realisable values have properties of additivity
and objectivity which conform with the requirements of measurement theory better than
do alternative measures. This arguments are particularly associated with Chambers(I966)
and Sterling(1970). Thomas (1969 and 1974) strongly supports for net realisable value,
his work on the allocation problem leading him to the conclusion that net realisable values
are the only values which avoid completely the allocation problem. NRV and marking-tomarket do, however, involve elements of subjectivity because of the unavailability of
market prices for some assets, but the underlying concept may be satisfactory to users.
Based on the descriptions above, we can see that the idea of marking to market and
net realisable value have only a slight distinctions. In fact marking-to-market stems from
the concept of net realisable value and has recently been substantiated further, so that in
general it will be more acceptable.
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14
1.4
THE EMERGENCE OF MARKING-TO-MARKET
Morris and Sellon (1991), in their studies on a banking environment, found that
critics of the current bank accounting system argue that changes in financial markets have
undermined the reliability of this system. They believe a market value accounting system
would overcome the limitations of the current system and thereby provide bank owners ,
creditors and regulators with a more relevant measure of capital. The
market value
approach has been advocated by academic economists arguing that market values, not
book values reflect the true economic values of financial instruments and institutions
/n
^
i i f\nr\\
(Benston
et.^ al,
1989)
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Wore recently in the United States, the accounting profession, some regulatory
agencies, and legislators have suggested that some form of market value accounting be
implemented for banks, thrifts5, and other financial institutions. The support for market
values can be explained by changes in financial markets and institutions during the 1980s
(Morris and Sellon, 199i). For instance, with financial deregulation and the associated
increase in interest rate volatility, interest rate risk has become a greater concern for banks
and other financial institutions. Because the current bank accounting system does not
reflect bank's interest rate exposure and permits accounting abuses designed to inflate
reported capital, critics have increasingly supported a change to market value accounting.
current accounting system of banks requires, that all assets that a bank intends to hold to maturity
and all bank liabilities be recorded in the bank's books at historical cost. In practice all bank loans are
reported at cost because they are expected to be held to maturity.
5
Thrifts is an American terms for savings and loan associations, mutual savings banks, and credit unions.
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15
A study by Wearing (1994) on bank performance in the U.K during the 1980s
argued that, if market value accounting had been used for banks when the debt crisis
began, the initial shock to the international financial system might have been greater, but,
on the other hand, the banks would have been more willing to engage in debt buyback,
debt-equity swaps or the sale of debts in the secondary'markets. This has important
policy implications because if these actions has been taken, it could have lessened the
economic problems of the debtor countries and maybe brought a faster solution to the debt
crisis. If this had been done, both the debtor countries and the banks could have benefited
(Wearing, 1994, p.942).
In Australia, the attractions of market value accounting were enhanced by two
decades of relatively high inflation and the distortions of value arising with asset price
speculation and its repercussions in the lute I960's and through the 1970's (Hogan,
1995,p.32). It was noted that much of the Australian impetus for a shift from historical
values has come indirectly from the efforts of supervisory authorities in the securities
industry to better inform markets with the goal of achieving more effective ones, and that
accounting information is just one of those features (Hogan, 1995,p.32).
In the United States ( according to study done by Bernard et, al. 1995) the bank
capital adequacy regulations have traditionally relied on historical-cost accounting
measures.
Some adjustments recognize changes in the market values of assets or
liabilities, but they fall short of eliminating the gap between book values and market values.
The remaining gap stems primarily from four causes:-
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THESIS KAKiT.v.'cAh
16
a) failure to recognize changes in the values of long term investments and loans resulting
from changes in interest rates,
b) delays in recognising value decreases from increased credit risks.
c) failure to recognize changes in the values of liabilities
d) failure to recognize changes in the value of intangible assets such as the so-called core
deposit premium. ( Bernard et. at, 1995,p. 4)
The market value of bank capita! (asset) reveals the impact of changes in credit
quality and interest rates on bank earnings. The market value of a financial instrument can
be defined as the current price at which the instrument can be bought or sold. (Morris and
Sellon, 1991). Market prices are readily available for assets such as government securities,
which are actively traded. As to those instruments that are not actively traded, including
most bank loans and deposits, market values can only be estimated. For many assets and
liabilities, market values can be estimated using a present value model. In general, the price
an investor will pay for a financial instrument depends on the return he will receive from
this investment relative to the return on competing investments.
1.5
ADVANTAGES OF MARKET VALUE ACCOUNTING AS COMPARED
TO HISTORICAL COST ACCOUNTING
The
proponents of market value accounting believes that a market value
framework can overcome two limitations of the current bank accounting system. They
specifically argue that a market value system provides a better measure of capital when a
bank is exposed to interest rate risk and eliminates accounting abuses caused by the
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17
current system. One of the limitations of the current system adopted by banks is that it
neglects the effects of changes in interest rates on capita!. By assuming that bank hold
assets to maturity, the current system implicitly assumes that interest rate changes will not
significantly affect a bank's earnings or its solvency. MVA proponents believe instead that
changes in financial markets have left banks increasingly exposed to interest rate risk.
Because MVA reflects risk it is then a superior system to a book value system.
Another advantage of MVA is that it provides solution to accounting abuses under
the current system.
This is reflected in the practice of gains trading in which banks can
selectively realize capital gains by selling investment account assets that have appreciated
in value.
These realized gains boost current income and increase the book value of a
bank's capital. However, the bank can continue to value assets with unrealized losses at
book values, which is potentially misleading to the extent that it suggests that higher
.
current income and capital imply higher future income andcapitaj-er, -: : ; .;-.Jn-.-i;-'. • : : • :
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The biggest problem with Historical Cost Accounting (HCA) for banks is when
measuring a bank's capital. A bank's capital(asset) valuation should reflects changes in
credit quality, althpugh the existing system does not reflect changes in interest rates and
can be manipulated and later provide a misleading estimate of bank capital. The current
accounting system of banks requires that all assets that a bank intends to hold to maturity
and all bank liabilities to be recorded in the bank's books at historical costs. In practice all
bank loans are reported at cost because they are expected to be held to maturity. For
securities, the bank must indicate whether it plans to hold them to maturity or engage in
active trading. Those securities that a bank intends to hold to maturity are held in its
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THcn'!"*
'J\/ >« •N• f' -i •i;•• •' : -i i *
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investment account and are reported at cost . Other securities are held in the bank's
trading account and are reported at current market values. As a practical matter, studies by
most banks suggest that they hold very few securities in trading accounts so that the vast
majority of bank assets are reported at. cost. If a bank seiis an investment security before
maturity at a capital gain, the gain increases the book value of its assets. Since assets in
the trading account are reported at market value, both realized and unrealized capital gains
and losses on these securities can affect the value of the capital ( Morris and Sellon,
1991,p.7)
MVA-could theoretically aid bank regulators(Shaffer,1995). HCA can conceal the
point at which a failing bank becomes insolvent, but it cannot change reality for the better;
a bank that is we^-k or insolvent remains so whether the books reflect it or not. HCA by
obscuring the true condition can cause regulators to leave open a failing bank too long and
so incur larger losses. The fact that HCA tends to conceal weaknesses also explains why
managers might prefer it to MVA. More specifically,
MVA helps bank regulators in at
least three ways. Firstly, it provides a more accurate measure of the bank's true net
worth, and as a result can make current capital guidelines and prompt intervention laws
more effective and assist regulators in timely closure of failing banks, thereby limiting
losses. Secondly, under MVA banks might need to increase their capital to a certain
extent to meet the current minimum requirements, and this additional capital would reduce
the probability of failure for those banks by providing a larger cushion to absorb losses.
Finally, since banks file financial statements more frequently than they are examined, the
adoption of MVA can improve the timeliness of available information even if regulators
have access to all the information required to mark a bank to market during examination.
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