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Consolidation challenges berkshire

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For this discussion, I'd like you to revisit the complexity of Berkshire Hathaway's case as presented in Chapter 9.

Berkshire Hathaway Download Berkshire Hathaway (intercorporate investments and consolidation)

Berkshire Hathaway Revisited Download Berkshire Hathaway Revisited (complex ownership situations)

Intercompany investments are playing an increasingly larger role in business activities. Reasons for these investment activities include: diversification, expansion, competitive opportunities and returns. In the Berkshire-Hathaway cases (Chapters 2 and 9), notice that each investment must be accounted for individually, e.g., using the equity method for particular investments while other securities are classified as available-for-sale.

After reviewing the case and the related topics presented in the chapter, respond to the questions below. As the discussion continues you are encouraged to pose additional questions, identify related articles which provide new or supporting information, and tie in similar instances of changes in the parent's ownership interest and multiple ownership levels which offer additional insight.

Case Questions

1. What three accounting rules guide the external reporting of intercompany investments? (briefly)

2. What are your thoughts on consolidation challenges Berkshire-Hathaway faces in accounting for these complex ownership structures?

Reference no: EM133239506

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