The problem is that if you don't update values continuously, you are surprised when you finally are forced to. Some stock on the public market that isn't doing well goes from 100 to 90, 80, 70... etc, and people thinking about the stock have to make decisions accordingly.
A private loan against that business can sit at 100 until the company decides it can't pay, and suddenly the loan is worth 20.
Say a bank is sitting on a pile of very safe bonds. If the interest rate suddenly increases, the mark-to-market value of the bonds goes way down. The bank would still expect to get the full value of all the bonds at maturity. But if the bank has to mark-to-market, the current value may be low enough that capitalization requirements force the bank to sell all the bonds in a fire sale. So even though the bank in theory could have held onto the assets and gotten exactly what it had expected from the start, it instead ends up taking a big loss.
For instance I submitted an article three times (spaced a year apart). The first two times the article got no upvotes. The third time it got 600+ and hit the top of the front page. It's just a matter of who happens to be looking at the New page at the time.