The Currency of Confusion: Berkshire's Operating Earnings Ruse In corporate finance, where every move is scrutinized, a peculiar accounting trick has come to light at Warren Buffett's Berkshire Hathaway.
The company's operating earnings, touted as a more reliable measure of performance than net earnings, have been boosted by $1. 2 billion in the second quarter due to currency fluctuations on its debt.
Berkshire relies heavily on operating earnings, which are supposed to provide a clearer picture of the company's underlying performance. However, this measure is not as robust as it seems.