Warren Buffett has reported a $1.14 billion loss at Buffett’s Berkshire Hathaway Inc. in the first quarter, the Omaha, Nebraska-based company said.That marked the company’s first net loss since 2009.
The loss was caused by new accounting-rule changes, which the Oracle of Omaha had predicted would cause nightmares. The rules require Berkshire to report unrealised gains or losses in equity investments in net income. The “requirement will produce some truly wild and capricious swings in our GAAP bottom line,” Buffett warned in his annual letter to shareholders released in February. The accounting change “will severely distort Berkshire’s net income figures and very often mislead commentators and investors.” Buffett has said operating results are a better barometer of company performance, in part because Berkshire’s more than $170 billion stock portfolio can fluctuate from quarter to quarter.