A form of accounting in which financial instruments are valued according to their current market price (or an estimate of that price). FVA developed in the 1980s and 1990s with the growth in the derivatives trade and the practice of marking these products to market (see marking to market); it is now enstrined in International Financial Reporting Standards. This form of accounting differs from traditional historical-cost accounting in that it allows for the recording of unrealized gains where the market price of assets has risen above their historical cost. Owing to the nature of the derivatives market, fair value accounting can therefore introduce a high degree of volatility to the profit and loss account (see hedge accounting). Critics of FVA argue that it exacerbated the banking crisis of 2008, as mark-to-market rules helped to create a downward price spiral in which complex derivatives products held by the banks rapidly became toxic assets.