Author Topic: Look through portfolio - Google Sheets with live prices  (Read 19656 times)

globalfinancepartners

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Re: Look through portfolio - Google Sheets with live prices
« Reply #50 on: July 03, 2018, 06:51:36 AM »
You have the gist right on KHC.  It is not consolidated technically, it is accounted for under the equity method.  The effect is the same for your purposes though.  Berkshire's share of the earnings are already included without the need to 'look-through.'


Dynamic

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Re: Look through portfolio - Google Sheets with live prices
« Reply #51 on: July 03, 2018, 06:54:44 AM »
You have the gist right on KHC.  It is not consolidated technically, it is accounted for under the equity method.  The effect is the same for your purposes though.  Berkshire's share of the earnings are already included without the need to 'look-through.'

Thanks GFP, I was hoping you'd tell me if I had the essence correct or not.

Would I also be right to imagine that changes in KHC's market price would not carry over to Book Value except perhaps in the annual report where Berkshire might reassess its carrying value, as I think it did in the 2017 Annual Report?

globalfinancepartners

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Re: Look through portfolio - Google Sheets with live prices
« Reply #52 on: July 03, 2018, 07:00:39 AM »
Correct, wiggles in KHC share price will not effect our carrying value unless they do another deal that involves BRK's ownership percentage changing.  BRK had to mark up their carrying value for KHC in connection with the Kraft merger because for GAAP purposes when your ownership goes from 52% to 26% or whatever the net result was, they treat it as if you sold a proportional piece of your position at the merger price (not for tax purposes obviously).

Wiggles in other stocks in the portfolio will now pass through the income statement, and always were reflected in carrying value (net of their deferred tax liability).

Dynamic

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Re: Look through portfolio - Google Sheets with live prices
« Reply #53 on: July 03, 2018, 08:02:15 AM »
Thanks for your response, GFP. I'm reassured that the look-through sheet is a better tool now than before these changes and the various others (such as accounting for the New England Asset Management and pension holdings) that you inspired earlier in this thread.