Bitcoin News

Tesla Bitcoin Buy Highlights Need to Fix US Accounting Rules

Tesla’s much-discussed recent decision to make a USD 1.5bn bitcoin (BTC) purchase continues to generate ripples in the American business pond – and has led some to claim accountancy rules should be updated to cover corporate crypto investments.

Industry observers are calling on the regulatory Financial Accounting Standards Board (FASB) to update the conventional accounting principles (known as GAAP), applicable for United States-based businesses. 

Kell Canty, the CEO of digital asset tax and accounting software company Verady, told Bloomberg Tax that “[s]ooner rather than later is what the approach should be.”

Canty added that the matter had become “a pressing need for the financial accounting industry.”

The shortcomings of existing accounting standards have been pointed out by none other than the BTC-keen, Elon Musk-led company itself.

In its February 8 annual filing, Tesla warned investors that impairment to the value of its bitcoin holdings, which are legally accounted for as “intangible assets,” could have a negative impact on the company’s earnings.

Tesla wrote,

However, some crypto investors disagreed with Long’s interpretation of the rules.

One commenter wrote,

“The recent investment by one entity, in and of itself, would not have changed that evaluation. While digital currencies are not currently the focus of the research project, that topic could be considered as part of the research project in the future.”

Learn more:
– 1,400+ Firms Flock To Learn About Bitcoin, But ‘There Is No Playbook’
– The G7 Taxman Is Coming for Your Crypto Profits
– Can’t Beat Crypto Regulators? Educate Them
– Crypto and Tax in 2021: Be Ready to Pay More

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