The business intelligence company MicroStrategy would have acted contrary to the accounting practices of the Securities and Exchange Commission (SEC) in its purchases of cryptocurrencies.
According to a report by Bloomberg, an SEC comment letter published Thursday showed that the regulator objected to MicroStrategy reporting its purchases of () based on non-GAAP, or generally accepted, accounting principles. The business intelligence firm has reported that it used these methods to calculate the figures for its BTC purchases excluding the “impact of stock-based compensation expenses and impairment losses and gains on sale of intangible assets” – essentially, nullifying some of the effects of cryptocurrency market volatility.
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Apparently, GAAP standards are not designed to report the value of cryptocurrencies. However, MicroStrategy has purchased 124,391 BTC as of December 30, representing more than $4.7 billion in value through various purchases totaling approximately $3.8 billion since August 2020. The company reported that it used non-GAAP practices to exclude cost “accumulated impairment losses” and based the value of his holdings on the market price of 1 BTC at 4:00 EST on the last day of each period.
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