Mark To Management

When an accountant produces a firm’s financial statements, they have to include an estimate of what each of the company’s assets is worth. Sometimes, that process is easy. The company holds 500,000 shares of its own stock. Shares are currently trading at $10 a piece on the NYSE. Those holdings are therefore worth $5 million. Pretty easy math.

But sometimes it gets more complicated. If the company has an asset that doesn’t have a continuous, liquid market, it might be hard to know the current value.

Your company's involved in drilling operations, and during one project, it uncovered a humanoid skull dating back 250,000 years. It's an amazing find...the kind of thing the press labels "priceless." But, as the accountant, you can't call it priceless. You have to assign it some value so you can get done with these stupid financial statements and start your vacation.

There are several acceptable methods for determining value in these hazier situations. Mark-to-management represents one of these.
The process attempts to determine a fair market value for an item under normal conditions. Essentially, it lets the company management determine what this amount should be.

So, in your case, the corporate bigwigs get together, look at some graphs, and sit through some presentation about recent sales of human fossils and the general museum market. Then they make a determination. It's an educated guess...but essentially, in a mark-to-management situation, the asset is worth whatever the bosses say it's worth.