BERKSHIRE HATHAWAY INC - 10-K filing on 2019-02-25

Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2018

Financial assets and liabilities measured at fair value on a recurring basis

Our financial assets and liabilities are summarized below as of December 31, 2018 and December 31, 2017, with fair values shown according to the fair value hierarchy (in millions). The carrying values of cash and cash equivalents, U.S. Treasury Bills, receivables and accounts payable, accruals and other liabilities are considered to be reasonable estimates of their fair values.


	Carrying Value			Fair Value			Quoted Prices (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
December 31, 2018
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	4,223		$	4,223		$	2,933		$	1,290		$	—
States, municipalities and political subdivisions			189			189			—			189			—
Foreign governments			7,502			7,502			5,417			2,085			—
Corporate bonds			7,440			7,440			—			7,434			6
Mortgage-backed securities			544			544			—			544			—
Investments in equity securities			172,757			172,757			172,253			203			301
Investment in Kraft Heinz common stock			13,813			14,007			14,007			—			—
Loans and finance receivables			16,280			16,377			—			1,531			14,846
Derivative contract assets ⁽¹⁾			172			172			2			52			118
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾			111			111			1			101			9
Equity index put options			2,452			2,452			—			—			2,452
Notes payable and other borrowings:
Insurance and other			34,975			35,361			—			35,335			26
Railroad, utilities and energy			62,515			66,422			—			66,422			—
December 31, 2017
Investments in fixed maturity securities:
U.S. Treasury, U.S. government corporations and agencies		$	3,953		$	3,953		$	2,360		$	1,593		$	—
States, municipalities and political subdivisions			854			854			—			854			—
Foreign governments			8,822			8,822			6,946			1,876			—
Corporate bonds			6,862			6,862			—			6,856			6
Mortgage-backed securities			862			862			—			862			—
Investments in equity securities			170,540			170,540			170,494			46			—
Investment in Kraft Heinz common stock			17,635			25,306			25,306			—			—
Loans and finance receivables			13,748			14,136			—			17			14,119
Derivative contract assets ⁽¹⁾			142			142			1			28			113
Derivative contract liabilities:
Railroad, utilities and energy ⁽¹⁾			82			82			3			69			10
Equity index put options			2,172			2,172			—			—			2,172
Notes payable and other borrowings:
Insurance and other			40,409			41,762			—			41,757			5
Railroad, utilities and energy			62,178			70,538			—			70,538			—

⁽¹⁾

Assets are included in other assets and liabilities are included in accounts payable, accruals and other liabilities.

Reconciliations of assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3)

Reconciliations of assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for each of the three years ending December 31, 2018 follow (in millions).


	Investments in equity and fixed maturity securities			Net derivative contract liabilities
Balance December 31, 2015	$	21,503		$	(3,785	)
Gains (losses) included in:
Earnings		3,593			880
Other comprehensive income		872			(2	)
Regulatory assets and liabilities		—			(11	)
Acquisitions		10			—
Dispositions and settlements		(8,656	)		(101	)
Transfers into/out of Level 3		(1	)		195

Balance December 31, 2016		17,321			(2,824	)
Gains (losses) included in:
Earnings		—			888
Other comprehensive income		1,157			(3	)
Regulatory assets and liabilities		—			(1	)
Dispositions and settlements		(59	)		(129	)
Transfers into/out of Level 3		(18,413	)		—

Balance December 31, 2017		6			(2,069	)
Gains (losses) included in:
Earnings		—			(118	)
Other comprehensive income		—			2
Regulatory assets and liabilities		—			3
Acquisitions		302			3
Dispositions and settlements		(1	)		(164	)

Balance December 31, 2018	$	307		$	(2,343	)

Fair value assets and liabilities measured on recurring basis, unobservable inputs, additional information

Quantitative information as of December 31, 2018, with respect to assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) follows (in millions).

Fair
Value

Principal Valuation
Techniques

Unobservable Inputs

Weighted
Average

Derivative contract liabilities – Equity index put options

2,452

Option pricing model

Volatility

18%