Charles Frischer

Congrats on another great quarter. The way I think about book value today, if I take the quarter ending number at $1,158 as a base, and what I do is I add $110 for the per share in excess value not included in book, I take another $100 for what I believe to be the true value of Poseidon and another $100 for the low mark on Bangalore and Ki and assume a 20% tax rate on those additions.

I, therefore, conclude an adjusted book value of closer to $1,400 versus the $1,150 that you report, giving us about 1.3x on my adjusted book. Is there something in that approach that you think is not accurate or might not be fair?

Peter S. Clarke

No, I think that's a fair approach. Yes, we mentioned that our consolidated investments and investments in associates, we carry them based on equity accounting, and for the listed companies, the market value is almost $2.4 billion above that. So that's a fair adjustment to make to the book value. That's why we think our intrinsic value is higher than our current book value.

seekingalpha.com - Fairfax financial holdings limited frfhf q2 earnings call transcript

I found this Q&A exchange on adjustments to book value interesting. I am not an accounting expert and I am not sure I understand why accounting book value is understated for Fairfax. I haven’t seen anyone making these adjustments for Berkshire Hathaway or Markel. What is different about Fairfax accounting compared to the other US companies?

Thanks.