Accounting and Valuation Summary and Analysis

Berkshire shareholders can be assured that the company financial statements are accurate. Buffett and Munger have most of their own money in Berkshire, run the business so all stockholders gain proportionately and are producing satisfactory results. Consequently, many take Buffett and Munger presentations on faith, but some others are analytical and like accounting notes. Buffett begins his comments with a six-point satire by his mentor Ben Graham. US Steel takes fictional accounting actions that show absurd accounting manipulations to let it undersell all competition to dominate the industry. The first step charges off fixed assets value to negative one million dollars so the company can convert depreciation cost to annual appreciation gain. Common Stock Par Value is reduced to one cent. Option warrants are used to pay salaries and wages, which eliminates payroll with increased employee compensation...