Tesla’s announcement to convert bulk of its Bitcoin holdings to fiat currency has opened a Pandora’s box for accountants, a Bloomberg report said.
See related article: Bitcoin falls as Tesla announces it sold 75% of BTC holdings
- Based on Tesla’s letter to shareholders, the sale of Bitcoin added US$936 million in cash to its balance sheet, Bloomberg said in its report.
- The electric car maker booked a “depreciation, amortization, and impairment” charge of US$922 million, but didn’t break out the line item, Bloomberg said.
- Tesla’s chief financial officer Zachary Kirkhorn told analysts the company netted a US$106 million cost to its profit and loss statement after impairment charges offset gains.
- However, a letter to shareholders states restructuring expenses at US$142 million, without explaining what else is in that charge, Bloomberg said.
- The Financial Accounting Standards Board (FASB) is still in the process of writing guidelines on digital assets with no disclosure rule except for companies to state the cost of Bitcoin holdings and factoring in impairment charges, Bloomberg said.
- The rest of Tesla’s digital asset holdings were worth US$218 million as of June 30, the electric car maker said.
See related article: Tesla records $51M Bitcoin impairment charge in Q3 despite profit growth