Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. how would you explain the accounting valuations fo

How would you explain the accounting valuations for the post -control step acquisitions to the Berkshire...

80.2K

Verified Solution

Question

Accounting

How would you explain the accounting valuations for the post-control step acquisitions to the Berkshire Hathawayexecutives?

Do you agree or disagree with the GAAP treatment of reportingadditional investments in subsidiaries when control has previouslybeen established?

Answer & Explanation Solved by verified expert
4.0 Ratings (595 Votes)
Warren Buffett has seemed round for suitable methods to speculate Berkshire Hathaways 106 billion money hoard and he has eventually provide you with an proposal Berkshire Hathaway The transfer despatched Berkshire shares soaring greater than 5 percent on Wednesday Starting in August the Omaha conglomerate may buy back extra shares becoming a member of a large number of other American companies which have embraced share purchases so to use cash piles swollen by tax cuts and strong profits Berkshires board accredited a change in how Buffett and his longtime lieutenant Charlie Munger make a decision whether or not to use the cash for share purchases Late Tuesday Berkshire mentioned the choice would relaxation on whether or not Buffett and Munger both agree the buying and selling price is beneath Berkshires intrinsic price That sounds innocuous sufficient however its a huge shift from the yardstick Berkshire has used in the final couple of years The ancient coverage avoided Berkshire from buying its inventory if it used to be trading greater than a hundred and twenty percent of book price Berkshires book worth headquartered on its B shares is estimated at 149 a share whilst its intrinsic price is extra like 236 in keeping with calculations with the aid of JP Morgan Chase analysts The shares currently are buying and selling at round 199 Founded on publication value Berkshire would not be equipped to purchase back shares at this stage below the historical policy However it will be able to purchase them again headquartered on intrinsic price underneath the brand new coverage Berkshire mentioned its sticking with the old coverage that it wont spend down the money pile below 20 billion which means it has about 86 billion or as a way to use the brand new policy supplies Berkshire with more flexibility to install excess cash of about 86 billion that is a big drag on returns principally given Berkshire has now not been able to seek out attractively valued acquisitions in an high priced market wrote Sarah DeWitt an analyst at JP Morgan in a notice on Tuesday Pursuing elephants Buffett has long mentioned in Berkshires annual letters to shareholders that the gap between the companys booklet price and its intrinsic worth has been widening in contemporary years The latter is an estimate of the longer term cash output of a industry discounted to reward worth In other phrases booklet worth tells you what quantity of money was put into a business    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

How would you explain the accounting valuations for the post-control step acquisitions to the Berkshire Hathawayexecutives?Do you agree or disagree with the GAAP treatment of reportingadditional investments in subsidiaries when control has previouslybeen established?

Other questions asked by students

Q

On March 1, Warwick’s Co., a women’s clothing store, purchased$75,000 of merchandise from a...

Accounting
Q

Four charges of magnitude +q are placed at the corners of a square whose sides have...

Physics
Q

Difference between Biot Savart and Ampere s Law

Physics
Q

lim sin x 4 sin 4 2 0 sin x 4 O sin x cos...

Geometry
Q

Find the derivative of the given function R T7e T dR dT

Calculus
Q

10 HW Write the English phrase as an algebraic expression Let x represent the number...

Algebra
Q

Pat is a shareholder in Muddled Thinking Limited (MTL) and owns 10 percent of the...

Accounting
Q

Beale Management has a noncontributory, defined benefit pension plan. On December 31,2024(the end of Beale's...

Accounting
Q

Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number...

Accounting
Q

Great Lakes Packing has two bond issues outstanding. The first issue has a coupon rate...

Finance
Q

O total fixed cost the level of activity O variable cost per unit Question 9...

Accounting
Q

Mentone Global Corporation (MGC) is attempting to evaluate two citernative capital structures - X and...

Finance