United States securities and exchange commission logo
April 29, 2022
Kenneth A. Brause
Chief Financial Officer
Burford Capital Limited
Oak House
Hirzel Street
St. Peter Port GY1 2NP
Guernsey
Re: Burford Capital
Limited
Form 20-F for the
Fiscal Year Ended December 31, 2021
Filed March 29,
2022
File No. 001-39511
Dear Mr. Brause:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within 10 business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the fiscal year ended December 31, 2021
Consolidated statements of comprehensive income, page 78
1. Please tell us how your
presentation of your consolidated statements of comprehensive
income complies with
the requirements of Rule 5-03 of Regulation S-X. In your
response, specifically
address the following matters:
Tell us how the use
of "income" and "total income" is consistent with the concepts of
sales and revenues
in sub-paragraph 1 of Rule 5-03.
Tell us why it is
appropriate to include "marketable securities income and bank
interest" and
"unrealized gain/(loss) relating to third-party interest in capital provision
assets" as
components of "total income" when they appear to be non-operating
income under
sub-paragraph 7.
Tell us why you do
not present "costs and expenses applicable to sales and revenues"
Kenneth A. Brause
FirstName LastNameKenneth A. Brause
Burford Capital Limited
Comapany
April NameBurford Capital Limited
29, 2022
April 229, 2022 Page 2
Page
FirstName LastName
separate from "other operating costs and expenses" as required by
sub-paragraphs 2
and 3.
Represent to us that in future filings you will present
aggregate comprehensive
income and then separately allocate it to noncontrolling
interests and controlling
interests consistent with sub-paragraphs 22, 23 and 24. In this
regard, we note that
although you indicate that your comprehensive (loss)/income
computation begins
with "net (loss)/income," the amounts presented are your "net
(loss)/income
attributable to ordinary shares." In your response, tell us why
none of the other
comprehensive income in any period presented relates in part to
your noncontrolling
interests.
Consolidated statements of cash flows, page 80
2. Please tell us why it is appropriate to classify your proceeds and
funding of both capital
provisions assets and marketable securities as operating activities.
Reference for us the
authoritative literature you rely upon to support your classification.
In your response, tell
us whether you actively trade the various securities in your
marketable securities portfolio.
Note to the consolidated financial statements
Note 2: Summary of significant accounting policies
Fair value of financial instruments, page 84
3. Please tell us why and how your single case, portfolio, portfolio with
equity risk and legal
risk management capital provision assets meet the definition of a
derivative and qualify
for derivative accounting. Reference for us the authoritative
literature you rely upon to
support your accounting. In your response address each element of the
definition of a
derivative in ASC 815-10-15-83, with specific discussion as to how
these capital
provision assets have no initial net investment or an initial net
investment that is smaller
than would be required for other types of contracts that would be
expected to have a
similar response to changes in market factors and how they are net
settleable.
4. Please tell us why you elected the fair value option for each of the
instruments identified
in the second paragraph of this policy note. Represent to us that you
will disclose the
reason for each election in future filings as required by ASC
825-10-50-28a or tell us
where you have made this disclosure in your filing.
Third-party interests in capital provision assets, page 86
5. Please provide us your analysis supporting your consolidation of
Colorado Investments
Limited ("Colorado") and why the third-party interest in Colorado is
accounted for as a
collateralized borrowing rather than a noncontrolling interest in
shareholders'
equity. Reference for us the authoritative literature you rely upon to
support your
accounting. In your response, tell us:
The equity interest you hold in Colorado;
The relevance of your assessment that Colorado does not meet the
definition of a
Kenneth A. Brause
FirstName LastNameKenneth A. Brause
Burford Capital Limited
Comapany
April NameBurford Capital Limited
29, 2022
April 329, 2022 Page 3
Page
FirstName LastName
business; and
Why it is appropriate to charge/credit the statement of
operations impact of a
collateralized borrowing on your income/revenue line item in your
statements of
comprehensive income.
Compensation and benefits
Equity compensation, page 88
6. Your disclosure appears to imply similar accounting for restricted
stock grants with
service and performance conditions versus those with service and
market conditions.
Please confirm that you apply the differing guidance in ASC
718-10-30-12 for the former
and ASC 718-10-30-14 for the latter. Otherwise, tell us the impact on
your financial
statements for applying the differentiated accounting. In any regard,
represent to us that
in future filings you will modify your policy disclosure to explain
the differing accounting
for these awards.
Note 4: Income taxes, page 92
7. Please tell us how the $3,177,000 of deferred tax asset for net
operating loss
carryforwards at December 31, 2021 in the table on page 94 is
reasonable. In this regard,
at the US federal maximum statutory rate of 21%, the $21 million in US
federal net
operating loss carryforwards would equate to a deferred tax asset of
about $4.4 million; an
amount in excess of the deferred tax asset you disclose and this does
not include the $31
million of US state and $8 million of other foreign net operating loss
carryforwards.
Note 5: Segment reporting, page 94
8. We note that your segment tables presented beginning on page 95 are
essentially full
statements of comprehensive income that include multiple profit
measures while ASC
280-10-50-22 requires the disclosure of a single measure of segment
profit or loss. Please
provide us proposed revised segment disclosure to be provided in
future filings that
presents only a single measure of segment profit or loss in your
financial statement
footnotes.
Note 6: Capital provision assets, page 98
9. Please tell us why it is appropriate to include items other than
realized gains/losses and the
change in fair value of your capital provision assets in your capital
provision income
revenue line item as depicted in the table on page 99. In your
response reference for us
the authoritative literature you rely upon to support your position
and address each of the
following line items from the table:
interest income on certain capital provision-indirect assets;
interest and other income/(loss);
impairment of other asset;
foreign exchange gains/(losses);
Kenneth A. Brause
Burford Capital Limited
April 29, 2022
Page 4
net gain of derivative financial instruments;
loss on financial liabilities at fair value through profit or
loss; and
gain/(loss) on equity securities.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Mark Brunhofer at 1-202-551-3638 or Sharon Blume at
1-202-551-
3474 with any questions.
FirstName LastNameKenneth A. Brause Sincerely,
Comapany NameBurford Capital Limited
Division of
Corporation Finance
April 29, 2022 Page 4 Office of
Finance
FirstName LastName