2 years ago
Michael Saylor’s MicroStrategy won’t beryllium capable to region swings successful the worth of its tremendous bitcoin holdings from its unofficial accounting measures, according to remark letters released Thursday by the SEC, Bloomberg reported Friday afternoon.
MicroStrategy utilized non-GAAP rules, oregon measures that don’t comply with U.S. mostly accepted accounting principles, to amusement what its income would person been if it didn’t person to impair its bitcoin holdings, Bloomberg noted.
Under modular accounting rules, the worth of integer assets specified arsenic cryptocurrencies indispensable beryllium recorded astatine their outgo and past lone adjusted if their worth is impaired, oregon goes down. But if the terms rises, that does not get reflected until an plus is sold.
The SEC told MicroStrategy in a filing connected Dec. 3 that “...we entity to your accommodation for bitcoin impairment charges successful your non-GAAP measures. Please revise to region this accommodation successful aboriginal filings.”
In mid-December, MicroStrategy replied to the SEC that it would “revise its disclosures of non-GAAP measures successful aboriginal filings to region the accommodation for impairment losses and gains connected merchantability related to bitcoin, arsenic requested by the Commission,” according to a filing.
MicroStrategy held astir 124,391 bitcoins connected its equilibrium sheet arsenic of precocious December, which were worthy astir $4.3 cardinal astatine existent prices. The company’s CEO Michael Saylor is simply a bitcoin bull, likening the cryptocurrency to “digital gold” and has said galore times the institution does not program to merchantability its bitcoin holdings.
The institution didn’t instantly respond to CoinDesk’s petition for further comment.
MicroStrategy shares were down astir 17% successful Friday’s trading session, with astir of the declines occurring earlier successful the time arsenic bitcoin prices continued to slump sharply.
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Michael Bellusci is CoinDesk's crypto payments reporter.
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