The company BTC holdings carry an impairment cost which concerns the Securities and Exchange Commission (SEC). Impairment cost indicates the amount of money lost if the price of an asset on the balance sheet drops compared to when it was first purchased. MicroStrategy is driving a renewal of US accounting practices to reflect the volatility of crypto assets. The SEC stated that it expects the firm to stop adjusting for impairment losses in accounting practices and use traditional methods.
In the fourth quarter, the company posted USD 146.6 million in Bitcoin impairment costs. In 2021, the firm’s impairment charges reached a record high USD 830.6 million compared to USD 70.7 million in 2020. Still, holding bitcoin on the balance sheet continues to be a priority of the firm. Today the company continues its buying spree, acquiring an additional 660 BTC for about USD 25 million in cash. That brings its total to 125,051 BTC.
Michael Saylor, CEO of MicroStrategy stated that the firm wants the investors to think of MicroStrategy as an alternative to bitcoin futures based exchange traded funds. As the firm continues to provide indirect exposure to cryptocurrency without the fees associated with rolling over contracts.
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