4/30/2019Enron Scandal: The Fall of a Wall Street Darling4/11Mark-to-Market"America's Most Innovative Company"Skilling joined Enron at an auspicious time. The era's minimal regulatory environmentallowed Enron to flourish. At the end of the 1990s, thedot-com bubblewas in full swing,and theNasdaqhit 5,000. Revolutionary internetstockswere being valued at preposterouslevels and, consequently, most investors and regulators simply accepted spiking shareprices as the new normal.One of Skilling's early contributions was to transition Enron's accounting from a traditionalhistorical cost accounting method to amark-to-market (MTM) accounting method, for whichthe company received official SEC approval in 1992. MTM is a measure of the fair value ofaccounts that can change over time, such as assets and liabilities. Mark-to-market aims toprovide a realistic appraisal of an institution's or company's current financial situation, and itis a legitimate and widely-used practice. However, in some cases, the method can bemanipulated, since MTM is not based on "actual" cost but on "fair value," which is harder topin down. Some believe MTM was the beginning of the end for Enron as it