Buffett backs mark-to-market

Buffett backs mark-to-market

Fair value accounting works for world's most successful investor

Warren Buffett, one of the world’s most successful investors and one of its
richest men has given his backing to mark-to-market accounting, even if it
contributed to the worst year for his investment company since it began trading
in 1965.

Buffett said in his highly personalised annual chairman’s statement to
investors: ‘We endorse market-to-market accounting.’

In relation to derivative contracts the statement said: ‘We have told you
before that our derivative contracts, subject as they are to mark-to-market
accounting, will produce wild swings in the earnings we report. The ups and
downs neither cheer nor bother Charlie and me. Indeed, the “downs” can be
helpful in that they give us an opportunity to expand a position on favourable
terms. I hope this explanation of our dealings will lead you to think
similarly.’

Buffett’s investment company, Berkshire Hathaway, recorded a 9.6%, or $11.5bn
(£8bn), fall in its book value – the worst result in its 44 year history.

Further reading:


Buffett’s statement

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource