Berkshire Hathway's Uncommon Accounting

Cardozo Law Review, Vol. 19, No. 2 (1997) (Symposium on the Essays of Warren Buffett).

Posted: 26 Sep 1997

See all articles by Edmund W. Kitch

Edmund W. Kitch

University of Virginia School of Law


Berkshire Hathaway's reporting practices are different than those of other American public companies. Bershire Hathaway provides separate and additional summary accounting statements which are not in conformity with generally accepted accounting principles, provides look-through earnings that include the pro-rata share of portfolio companies, and explicitly discusses the relationship between economic realities and accounting conventions. Why is this style of reporting, which provides additional information to shareholders, so atypical? Possible answers include legal risks, job insecurity among managers, and the desire to protect strategically important information. As to the last two, Berkshire Hathaway is atypically situated. Even though uncommon, its style of reporting appears to have worked for Bershire Hathaway. Although it is very similar to a closed-end investment company, it sells at a premium to net asset value unlike most closed-end investment companies. Other issuers might benefit from emulating a reporting style that treats shareholders as grown ups and partners.

Suggested Citation

Kitch, Edmund W., Berkshire Hathway's Uncommon Accounting. Cardozo Law Review, Vol. 19, No. 2 (1997) (Symposium on the Essays of Warren Buffett)., Available at SSRN:

Edmund W. Kitch (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States
804-924-7047 (Phone)
804-924-7536 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics