Berkshire Writes Down Stock Losses

NEW YORK (TheStreet) -- Berkshire Hathaway(BRK.B) wrote down investments in Swiss Re(rukn.vx), Sanofi Aventis(SNY)and U.S. Bancorp(USB) following talks with the Securities and Exchange Commission, according to a Feb. 4 letter from Berkshire CFO Marc Hamburg recently made public on the SEC's website.

Berkshire will not write down investments in Wells Fargo (WFC) or Kraft Foods(KFT), however, according to the letter.

Hamburg argued that Berkshire will eventually make money on all the investments it wrote down due to its "ability and current intent to hold these investments for an extended period of time," and its "opinion that the current financial condition and business prospects of each issuer are favorable."

Still, Berkshire agreed to the write-downs because it "recognizes the staff believes," that accounting rules "could be interpreted in such a manner," to require such a move, Hamburg's letter states.

Berkshire says it will not write down Kraft or Wells Fargo, however, because its losses are relatively small--just under 2.5% in the case of Wells and less than 5% for Kraft--and because both stocks came back substantially in 2010.

Hamburg's letter added in the case of Kraft that Berkshire expects to recoup its losses "in a relatively short period of time."

-- Written by Dan Freed in New York.

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