A mark is the value a holder assigns to a position at a reporting date. For legal assets, where no market price exists, a mark is a model-based or evidence-based estimate that should be re-derived as the matter moves.
A stale mark misstates a portfolio. A position's value changes when a motion is decided, a trial date moves or a counterparty's circumstances change, and a mark that stays at cost until resolution hides that movement.
A defensible mark states its method, its inputs and its cutoff date, and keeps the earlier marks beside it. Valuation inputs from the seller are labeled as such and kept separate from independently corroborated inputs.
A mark is not a realized value. It is an estimate at a point in time, and the difference between marks and realizations is itself a measure of how good the marking process is.
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