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Reportedly, SpaceX reduced the value of its Bitcoin by a total of $373 million and potentially liquidated all of its holdings.
The Elon Musk-led firm bounces back from 2021 and 2021 annual losses, reportedly achieving a slight Q1 2023 profit.
SpaceX Financial Statements Raise Questions About Bitcoin Holdings
The Wall Street Journal’s report on Aug. 17, which looked at the company’s financial statements, leaves uncertainty if SpaceX actually sold all of its Bitcoin:
“SpaceX wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency.”
However, Big Four Accounting Firm Deloitte declares that, typically, the accounting treatment for Bitcoin involves considering it as an “indefinite-lived intangible asset.” It states to account for Bitcoin at cost and then make adjustments if the price decreases.
Should the value of Bitcoin decline, the company must report a write-down in its books, referred to as impairment charges.
After recording a decrease, the asset’s value on the balance sheet cannot be “written up.” This rule applies to any subsequent Bitcoin price increase or rebound.
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In the fourth quarter of 2022, Tesla, which Musk also leads and holds a significant stake, revised down its Bitcoin holdings’ value due to a decline since its purchase. The company reported $34 million in impairment charges, while its overall holdings were assessed at $184 million.
Since June 2021, Tesla has consistently disclosed impairment losses in consecutive quarters.
Bitcoin Not Musk’s Favorite Crypto
While Musk’s companies might possess substantial holdings in Bitcoin, he often alludes to Dogecoin as his favored crypto.
On May 24, Musk voiced his preference for Dogecoin as his favorite crypto simply because it “has the best humor and it has dogs.”
Musk made it clear that he did not intend to provide any financial advice:
“I’m not advising anyone to buy crypto or bet the farm on Dogecoin or anything like that.”
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
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