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users.25 The meaning of this term is similar to, but is not
necessarily the same as that of, the term “fair market value”.
“Fair value” is broader than and may include “fair market value”.
The objectives of each of these two concepts also are distinct.
B. Mark-to-Market Accounting
Swaps dealers generally attempted during the relevant years
to mark their swap positions to market daily. The concept of
mark-to-market accounting requires that the market value of an
asset such as a swap be recorded on the balance sheet at each
financial reporting date and that any changes in market value
from one reporting date to the next be currently reflected in
income or loss.
C. Devon System and the Devon (Midmarket) Value
1. Devon System
FNBC and most other dealers used the Devon system in order
to ascertain their valuations for their mark-to-market accounting
systems. The Devon system was developed and marketed by an
independent software company named Devon Systems International,
Inc.26 The Devon system was during the relevant years the most
25 Most State statutes also usually define the term for
purposes of valuing dissenting stockholders’ appraisal rights
and, sometimes, for purposes of valuing property in cases of
marital dissolution. As discussed below, that definition is not
applicable here.
26 SunGard Systems International, Inc., a subsidiary of
SunGard Data Systems, Inc., acquired Devon Systems International,
(continued...)
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