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  "documentTitle": "Fairfax Financial Holdings Ltd. (FFH)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Muddy Waters Research",
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  "presentationDate": "2024-02-08 00:00:00",
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  "notes": "The slide uses a narrative structure to deconstruct a specific financial transaction, highlighting the components of the $261.8M gain.",
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      "text": "We see the $261.8 million accounting gain as abusive in nature, and arbitrarily determined at best.",
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      "text": "In addition to avoiding interest expense, Fairfax used the Eurolife transaction structure to produce accounting gains that were, in our view, largely without basis.\nFairfax first recognized a $127.3 million fair value gain on its call option for the A Shares in the years preceding its exercise in 2021. We see no basis for this gain.\nThen Fairfax took a fair value gain on its B Shares when it bought out OMERS' last shares. The amount of the gain was $130.5 million, and we view the methodology for calculating it as highly abusive. Fairfax added the $127.3 million fair value of the call option it exercised to the total payment it made to OMERS on the exercise of $142.7 million. (Note that on the previous slide in FN 5, we explain that the total consideration paid at the time included €9.8 million for \"investment performance\" and €13.5 million of accrued dividends, for a total of €120.7 million.)\nFairfax then added a $4.0 million bargain purchase gain on the option exercise to book a total profit in 2021 on the transaction of $261.8 million ($127.3 million option FV gain + $130.5 million shares FV gain +$4.0 million bargain purchase gain) for a total of $261.8 million.",
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      "text": "accounting gain: $261.8 million",
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      "text": "Eurolife – Egregious Accounting Gains",
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