Berkshire Hathaway said it will go into more detailed explanation in its disclosure statement after the Securities and Exchange Commission raised questions about the company's reporting.
The Omaha, Neb.-based company, headed by Warren Buffet, said in a letter to the SEC that after examining questions the division's accounting department raised in April, it would go into more detail to explain how it arrived at its reserve for loss and loss adjustment expense estimate for some of its subsidiaries.
The SEC said Berkshire needed to go into greater detail about how it arrived at its estimates and the factors that could affect changes in the future.
A letter dated Sept. 15, from Marc D. Hamburg, vice president and principal financial officer for Berkshire, explained that the company's figures in these areas were based on estimates that were adjusted as claims were reported. These changes in the estimates accounted for what appeared to be discrepancies from one reporting period to another.
Mr. Hamburg said Berkshire would incorporate greater explanation of these figures in its December report.
The reporting dealt with individual subsidiaries of the company: GEICO, General Re, and BHRG. The SEC's letter dealt with the company's Form 10-K for the year ending Dec. 31, 2005.
In response, Joseph J. Roesler, accounting branch chief for the SEC wrote on Sept. 29, "We have completed our review of your Form 10-K and have no further comments at this time."
The letters were among SEC filings for Berkshire Hathaway.
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