MicroStrategy’s company technique is partly primarily based on the acquisition and holding of bitcoin. As of March 19 it held 214,246 bitcoin value $13.9 billion at present costs. Benchmark notes that because the software program firm began holding bitcoin on its steadiness sheet it has recorded $2.27 billion in cumulative impairment losses because of a Monetary Accounting Requirements Board (FASB) rule referred to as ASC 350.
The FASB issued new steerage in December final 12 months that enables firms that maintain digital belongings on their steadiness sheet to measure them at honest worth, and document adjustments in honest worth in internet revenue in every reporting interval. The brand new guidelines change into efficient as of Jan. 1, 2025, however early adoption of the usual is allowed.
“The influence of doing so on MSTR’s reported earnings per share could be large: the corporate in its 2023 10-Ok report estimated that early adoption would enhance its 2024 starting retained earnings steadiness by ~$3.1 billion,” analyst Mark Palmer wrote.
