Company: FRFXF
Filing Date: 2025-10-09
Form Type: F-10/A
Source: 0001104659-25-098335
Chunk: 46

Company: FAIRFAX FINANCIAL HOLDINGS LTD/ CAN
Filing Date: 2025-10-09
Form: F-10/A
Chunk 46
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 statements of earnings and financial position, which affects financial reporting risk.

Financial reporting risks relating to deferred taxes associated with amendments to IAS 12.

On May 23, 2023, the IASB issued amendments to IAS 12 Income Taxes (“

#### IAS 12
”) to provide temporary relief from accounting and disclosure for deferred taxes arising from the implementation of Pillar Two model rules published by the Organisation for Economic Co-operation and Development (“

#### OECD
”). The Pillar Two model rules provide a general framework for the implementation of a 15% global minimum tax, which is to be applied on a jurisdiction-by-jurisdiction basis. We retrospectively adopted this amendment during the second quarter of 2023 and have applied the exception to recognizing and disclosing information regarding Pillar Two deferred income tax assets and liabilities.

To the extent that the value of our goodwill, indefinite-lived intangible assets or investments in associates is impaired, we are required to write down the value of such assets.

The goodwill, indefinite-lived intangible assets and investments in associates on our consolidated balance sheet originated from various acquisitions and investments made by us or our operating subsidiaries. Continued profitability and achievement of financial plans by acquired businesses and associates is a key consideration for there to be no impairment in the carrying value of goodwill, indefinite-lived intangible assets and investments in associates. An intangible asset may be impaired if the economic benefit to be derived from its use is unexpectedly diminished. An investment in an associate is considered to be impaired if its carrying value exceeds its recoverable amount (the higher of the associate’s fair value and value-in-use).

Management regularly reviews the current and expected profitability of operating companies and associates and their success in achieving financial plans when assessing the carrying value of goodwill,

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indefinite-lived intangible assets and investments in associates. The carrying values of goodwill and indefinite-lived intangible assets are tested for impairment at least annually or more often if events or circumstances indicate there may be impairment. Investments in associates with carrying values that exceed their fair values are tested for impairment using value-in-use discounted cash flow models at each reporting date.

Our failure to realize deferred income tax assets could lead to a write-down or tax authorities may take differing positions from ours, either of which could adversely affect our results of operations.

Realization of deferred income tax assets is dependent upon the generation of taxable income in those jurisdictions where the relevant tax losses and temporary differences exist. Failure to achieve projected levels of profitability could lead to