Financial stability can be defined as a situation in which the intertemporal allocation of resources is felt to be “in equilibrium” or “sustainable”, which means that it is at the same time in line with the desires of individual agents and with the need to keep up with the debt obligations that have been subscribed.
Related to hedging from the accounting aspect is the issue of marking to market all the outstanding derivative contracts i.e. recording the value of outstanding financial contracts at fair value. In recent times, given the volatility of Rupee much press coverage has been directed towards the Marked To Market (MTM) losses of corporates.