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  "documentTitle": "Fairfax Financial Holdings Ltd. (FFH)",
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  "authorName": "Muddy Waters Research",
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  "presentationDate": "2024-02-08 00:00:00",
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  "notes": "The slide highlights a specific accounting maneuver used to artificially boost book value and report a profit.",
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      "text": "Fairfax determined that the Fair Value of its Quess stake as of March 31, 2018 was $1.1 billion, which resulted in a non-cash gain (and boost to Book Value) of $889.9 million.",
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      "text": "non-cash gain: $889.9 million",
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      "text": "As of Q1 2018, Fairfax was the largest shareholder of Quess, which it had been consolidating as a subsidiary. When Fairfax de-consolidated Quess, it accounted for it through \"Fair Value Through Profits and Losses\" (\"FVTPL\") - this is important to keep in mind when looking at the remainder of 2018.",
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      "text": "Under IFRS, Fairfax was allowed to re-measure the carrying value of Quess. Fairfax proceeded to \"fair value\" its Quess stake, which is a process that, in our view, is easily manipulated. Accordingly, Fairfax determined that the Fair Value of its Quess stake as of March 31, 2018 was $1.1 billion, which resulted in a non-cash gain (and boost to Book Value) of $889.9 million. This accounting gain enabled Fairfax to report an overall profit in Q1 2018.",
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      "text": "1 Fairfax Financial Holdings Annual Report 2018, p. 61.",
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      "text": "Initial Accounting Impact of the Deconsolidation",
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