Warren Buffet is the best investor on the planet. Not many would disagree with this statement. In his 2019 letter to Berkshire Hathaway stockholders, and in many of his letters to stockholders in past years, he speaks in detail about the accounting presentation of the results of Berkshire, and the impact of changes in accounting (GAAP) requirements on the reported results of Berkshire Hathaway. First, what were two such observations from the 2019 letter? Second, what do you think that Buffet’s attention to accounting issues implies for students studying finance? Said another way, is it important for students of finance to understand and interpret financial statements beyond just being able to find significant items such as Total Revenues or EPS?
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