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If the 600M euros in future amounted to 524M euros now; I'd say the cash flows were lightly discounted due to the low interest rate environment. Or did you expect close to 600M euros present value?

What I am saying is that it makes no sense that both sides of the transaction book gains, right? The whole thing is pretty much zero sum - Berkshire takes on Caixa's liabilities, for a fee. If Caixa is booking a big gain, then Berkshire should be booking a big loss, if there's any sense in accounting world. The only way it would make sense for Caixa to book such a big gain, is if Berkshire is actually making a terrible deal, and hugely overpaying for those future cash flows, and that is highly unlikely.

Of course Caixa is getting EU600 up front in exchange for future cash flows, but it can't just book most of that as a profit, and certainly not in the current year, right? Unless it was being forced to heavily discount those future cash flows, but a EU524 gain on receiving EU600 cash would suggest that they were only valuing those future cash flows at EU76, and ended up getting EU600 for them. But that seems too steep a difference to be accounted for any conceivalbe discount rate.

Regards, DTM
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