Tesla Dropped Bitcoin Left the Accountants Puzzled

Bloomberg report states that Tesla’s announcement to convert most of its Bitcoin holdings to fiat currency. This has opened a Pandora’s box for accountants.

Bloomberg said in its report that in Tesla’s letter to shareholders, the sale of Bitcoin has added US$936 million in cash to its balance sheet.

Bloomberg further added that the electric car maker booked a “depreciation, amortization, and impairment” charge of US$922 million, but didn’t break out the line item.

Tesla’s chief financial officer Zachary Kirkhorn told analysts that after the impairment charges offset gains, the company netted a US$106 million cost to its profit and loss statement.

However, in a letter to the shareholders, it states that the restructuring expenses was US$142 million, without explaining further what is in that charge.

Bloomberg reports that the Financial Accounting Standards Board (FASB) is still in the process of writing guidelines on digital assets. However, FASB does not have any disclosure rule except for companies to state the cost of Bitcoin holdings and factoring in impairment charges.

The rest of Tesla’s digital asset holdings are worth in total US$218 million as of June 30, the electric car maker said.

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