Voices Crypto accounting and decrypting digital assets

^{BY Accounting Today | January 10, 2023}

As CFOs and CAOs are now discovering, there's a whole new level of complexity with cryptocurrencies and digital assets beyond volatility. Specifically, GAAP doesn't yet provide guidance on crypto accounting, leaving many accounting teams in the dark.

Using Tesla's massive crypto investment as an example, the company put $1.5B into Bitcoin back in February 2021. Just two weeks later, Tesla's stake had grown to $2.5B, only to fall to $600 million to $700 million soon thereafter, burying the cost basis in an ocean of red. Although the company has divested most of its Bitcoin holdings at this point, the investment might still present a significant challenge to Tesla's accountants.

Thankfully for companies like Tesla and the many others in a similar predicament, the AICPA has filled the crypto guidance void in U.S. GAAP with its digital asset working group, publishing what has quickly become the non-authoritative gospel on accounting for cryptocurrencies and the like.

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