MicroStrategy’s company technique is partly based mostly on the acquisition and holding of bitcoin. As of March 19 it held 214,246 bitcoin price $13.9 billion at present costs. Benchmark notes that because the software program firm began holding bitcoin on its stability sheet it has recorded $2.27 billion in cumulative impairment losses as a consequence of a Monetary Accounting Requirements Board (FASB) rule known as ASC 350.
The FASB issued new steerage in December final 12 months that enables corporations that maintain digital belongings on their stability sheet to measure them at truthful worth, and file adjustments in truthful worth in web earnings in every reporting interval. The brand new guidelines turn 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 can be huge: the corporate in its 2023 10-Ok report estimated that early adoption would improve its 2024 starting retained earnings stability by ~$3.1 billion,” analyst Mark Palmer wrote.