I gather both standards are used; mark to market when the equities have a profitable value, and M2M or a similar pricing system justified in high-falutin financial-newspeak that amounts to the same thing, when the "troubled" assets are, essentially, worthless.

http://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles

I agree, I am just trying to trace the exact mechanism in the UK.
Golem explains the process in terms of what happened in the US
"After a frantic year of flooding lobbying money into the accounts of the relevant Senators and Congressmen and women, Mark to Market rules were suspended on 2nd April of 2009. They were replaced by rules called Mark to Model by which the banks could "..use significant judgement in gauging prices of some investments…"" [Forests, Fire sales and Mark to Market]. But how did it happen in the UK? Gillian Tett says in Fool's Gold that the banks tried and failed to suspend mark-to -market when the crisis first started.[p242]. Maybe it wasnt necessary to remove mark-to market because the accounting standard gives authority to companies to abandon it in crisis situations either because markets are not deemed normal, or because normal trading is not taking place in financial assets so they can be reclassified as Level 3 assets which effectively allows mark to market. See Wiki [Mark to Market] and Credit Writedowns at http://www.creditwritedowns.com/2009/04/a-few-comments-about-mark-to-market.html

I am surprised there isnt more on the subject on the web

Thanks also for your consistently excellent posts both here and (formerly?) on CiF – they are invariably more enlightening and lucid than what passes for analysis on the Guardian and elsewhere.

Changing the subject slightly, have you seen Zeitgeist – Moving Forward, and if so what did you make of it?