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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 uses specific financial figures to highlight a discrepancy between market value and carrying value, suggesting accounting manipulation.",
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      "text": "Fairfax seems to have taken pains to avoid full impairments.",
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      "text": "discount rate: 12.8%",
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      "text": "Had Fairfax had employed FVTPL throughout 2019 as it initially had in 2018, Fairfax seemingly should have written down the value of its stake in Quess by more than half. Fairfax's carrying value could only have been decreased under the Equity Method through proportional losses or impairments. Fairfax seems to have taken pains to avoid full impairments.",
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      "text": "In 2019, Fairfax took a $190.6 million impairment on its Quess investment, but the resulting carrying value was still well in excess of the market value. The market seemingly had proven yet again that Fairfax's carrying value for an investment was unrealistic. At September 30, 2019, according to Fairfax's financials, the market value of its shares in Quess was $477.2 million while Fairfax continued to carry it at ~$1 billion.",
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      "text": "Seemingly to maintain this carrying value, Fairfax altered its valuation assumptions by changing from an after-tax discount rate of 13.1% in Q3 2019 to a discount rate of 12.8% in Q4 2019. We suspect that there were additional, undisclosed, modeling changes.",
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      "text": "1 Fairfax Financial Holdings Interim Financial Statements Q3 2019, Pg. 16. 2 Fairfax Annual Report 2019, Pg. 71; and Fairfax Interim Report Q3 2019, Pg. 16. 3 Fairfax Financial Holdings Financial Statements 2019 Q3, Pg. 16.",
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      "text": "2019: Avoiding Impairment by Lowering Discount Rate",
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