Mark to Market or Not Mark to Market?

The City of Vienna (which is also a federal state of Austria) has outstanding loans not only denominated in EUR, but also a significant portfolio of CHF loans (more than 1.5 billion EUR, as of end of the year 2014). With the increase of the CHF value compared to the EURfrom last weak, the present value increased by 300 million EUR.

Maybe surprisingly for non-Austrians, the treasurer of Vienna, Renate Brauner, stated that this increase in outstanding debt is only for accounting. Outstanding loans could be rolled over to new credit lines in CHF. If CHF in the future goes down somewhen, then this increase in debt will disappear again.

It's a kind of magic, isn't it?