In Q4, $147M of the charges for Impairment on the holdings of Bitcoin. The software company had lately told SEC it will simply revise the disclosures which are related to the adjustments for such impairments on the digital assets.
MSTR also known as the MicroStrategy has been report as the impairment charge for non-cash digital asset of $146.6 million in 4th quarter. About $65.2 million in prior quarter, as per the latest and updated earnings statement.
It has been observe that impairment reflects decline in price of the bitcoin against the price where bitcoin attained. Under the rules of standard accounting, worth of the digital assets like the cryptocurrencies should also get record at cost and simply adjust when the value gets impair and it moves down. But with the rise in the price, this does not actually get reflected till the asset gets sold.
MicroStrategy and impact on Bitcoin
For the year 2021, MicroStrategy has posted the complete impairment losses for digital asset of $831 million that is against $71 million in the year 2020.
The bitcoins of company’s held for 124,391 at the of Dec 31, 2021. It also attained for $3.752 of the billion. Thereby reflecting the average cost for each bitcoin of almost $30,159, as reported by the company.
MicroStrategy has also reported that it bought almost 660 add-ons bitcoins for about $25 million which is between 30th Dec 21 and 31st Jan 22. It offers the company with the total of almost 125,051 bitcoins. These are also value at $4.8 billion on recent price of about $38,700.
The SEC has also objected accounting adjustment of to MicroStrategy for the bitcoin holdings. Also, company later has told commission. It will “revise the disclosures of the non-GAAP measures for the future filings. It is for simply removing adjustment for the impairment gains and losses on the sale related for bitcoin.
