8-KOther Events

BERKSHIRE HATHAWAY INC 8-K Report, Corporate Update (Jul 7, 2009)

Filed July 7, 2009For Securities:BRK-BBRK-A

Summary

This 8-K filing by Berkshire Hathaway Inc. (BRK-B) details the company's adoption of Statement of Financial Accounting Standards No. 160 (SFAS 160), "Noncontrolling Interests in Consolidated Financial Statements," effective January 1, 2009. While the prospective application of SFAS 160 did not materially impact Berkshire's consolidated financial condition, results of operations, or cash flows, the retrospective presentation requirements led to reclassifications on previously reported financial statements. The primary impact for investors is the change in how noncontrolling interests are presented. Previously reported as separate minority shareholders' interests and other liabilities, these are now reclassified to a distinct component within shareholders' equity. Similarly, net earnings attributable to noncontrolling interests are now explicitly shown separately from earnings attributable to Berkshire shareholders, though this change does not affect the calculation of earnings per share for Berkshire shareholders.

Key Highlights

  • 1Berkshire Hathaway adopted SFAS 160 effective January 1, 2009, changing accounting for noncontrolling interests.
  • 2Prospective application of SFAS 160 had no material impact on the company's financial condition, results, or cash flows.
  • 3Noncontrolling interests are now reclassified to a separate component of shareholders' equity on consolidated balance sheets.
  • 4Previously, noncontrolling interests were presented as minority shareholders' interests and other liabilities.
  • 5Net earnings attributable to noncontrolling interests are now reported separately from net earnings attributable to Berkshire shareholders.
  • 6The adoption of SFAS 160 does not impact previously reported earnings per share for Berkshire shareholders.
  • 7The change also affects the presentation of operating cash flows by adjusting how earnings attributable to noncontrolling interests are treated.

Frequently Asked Questions

SFAS 160 is a U.S. accounting standard that changed how companies report noncontrolling interests (previously called minority interests) in consolidated financial statements. Berkshire Hathaway is filing this 8-K to inform investors about the adoption of this standard and its impact on their financial reporting.

No, the adoption of SFAS 160 did not negatively impact Berkshire Hathaway's financial condition. While there were reclassifications on the balance sheet, the total shareholders' equity for Berkshire shareholders actually increased slightly due to the reclassification of noncontrolling interests into equity. The company explicitly states there was no material negative impact.

This change has no impact on the calculation of earnings per share for Berkshire shareholders. While net earnings attributable to noncontrolling interests are now shown separately, the earnings per share figure still only considers earnings attributable to Berkshire shareholders.

The filing notes that the original financial data (as presented before the SFAS 160 reclassification) can be found in Berkshire's Annual Report on Form 10-K for the year ended December 31, 2008, specifically within the 'Item 8 – Financial Statements and Supplementary Data' section.