SEC Rejects MicroStrategy’s Accounting Practices Regarding Bitcoin By Cointelegraph

Business intelligence firm MicroStrategy had acted in violation of Securities and Exchange Commission (SEC) accounting practices in its cryptocurrency purchases.

According to a report from Bloomberg, a letter of comment from the Securities and Exchange Commission (SEC) published Thursday showed that the regulator objected to MicroStrategy’s report on its purchases of ( ) based on non-GAAP accounting principles, or generally accepted accounting principles. The business intelligence firm reported that it used these methods to compute numbers for its BTC purchases excluding “the impact of equity-based compensation expense, impairment losses, and gains on the sale of intangible assets” — essentially negating 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 had purchased 124,391 BTC as of December 30, which represents more than $4.7 billion in value through various purchases totaling about $3.8 billion since August 2020. The company stated that it used non-GAAP practices to exclude Cost “Accumulated impairment losses”. The value of his holdings at the market price of 1 BTC at 4:00 EST on the last day of each period.

Read the full article on Cointelegraph