Analytical software provider MicroStrategy supported offer FASBwhich involves the use of accounting for cryptocurrencies at fair value in the balance sheet.
Today @MicroStrategy submitted a letter responding to and supporting FASB’s proposed accounting standards update to allow fair value accounting for corporate #Bitcoin holdings. If you agree, you can voice support via the FASB survey by 6/6/23. https://t.co/ubJzzoOYat
— Michael Saylor⚡️ (@saylor) May 22, 2023
“We appreciate the initiative of the organization”, the statement says.
The proposal is under public comment until June 6th.
The company submitted responses to eighteen FASB questions.
Under the current standard, “Indefinite Life Intangible Asset Accounting Model”, MicroStrategy must use the original purchase price and then adjust it for accumulated impairment charges.
According to the results of the first quarter of 2023, the company indicated the value of the acquired first cryptocurrency at $2 billion, while its actual value is $3.82 billion at the moment, according to BitcoinTreasuries.
“Reporting our digital asset position under the FASB’s proposed fair value model would provide investors with a more up-to-date view of our financial position and the economic value of our bitcoins,” — explained in the company.
MicroStrategy emphasized that accounting for cryptocurrencies at fair value is a more useful and balanced model for investors than the current one. In the latter, only a decrease in the indicator is recognized, while a subsequent increase is not taken into account.
“As a result, a distorted picture of ownership of an organization’s digital assets is formed, which can be confusing for investors unfamiliar with the accounting standard,” the statement says.
Recall that in April 2023, the company’s position in bitcoin went positive after a breakdown at $30,000.
In November 2022, the company’s executive chairman, Michael Saylor, confirmed MicroStrategy’s course for further purchases of digital gold.
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