No. of Recommendations: 5
In 2018 with the adoption of accounting standards Update number 2016-01 issued by the FASB....it required companies to include UNREALIZED Gains and losses from equity investments in their net income.
Comparisons to a period when Berkshire could record those gains or loses in comprehensive income--to me are not useful ( I like the old rules better, so does Waren but...)
Comparisons to book value multiples with respect to both the composition of the company's investments AND the major accounting change--are, particularly, potentially quite misleading.
This is an inappropriate conclusion. The new FASB standard changed the recognition of unrealized gains and losses so that they are now reported as part of net income, as you note. But even before that rule, those unrealized gains and losses were included in equity, as they continue to be after the rule. Which means that price/book measures were not affected.
