Potential Volatility Comes to Earnings: A Look at Berkshire Hathaway’s Equity Investments

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Potential Volatility Comes to Earnings: A Look at Berkshire Hathaway’s Equity Investments

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Publication Date:
June 19, 2019

Source:
Darden School of Business

Based in Omaha, Nebraska, Berkshire Hathaway Inc. is a holding company that invests in many diverse businesses. The most significant of those are property and casualty insurance businesses, although the company owns businesses in the railroad, utilities, energy, and finance industries as well. The case focuses on accounting for investments at Berkshire Hathaway. The company adopted the new US guidance (ASU 2016-01) on accounting for investments in its 2018 10-K, and key excerpts from that report comprise much of the case. Students are asked to review Berkshire Hathaway’s financial statements and the footnotes related to its investments, consider the method of accounting for those investments, and decipher their impact on the financial statements.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

Potential Volatility Comes to Earnings: A Look at Berkshire Hathaway’s Equity Investments

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