Jan 31– The Financial Accounting Standards Board (FASB) rule change related to digital assets resulted in Tesla (TSLA, Financial) recording $600 million extra in net income during Q4 2024. Under the new mandate, companies need to update the values of digital assets through market evaluations each quarter, which allows Tesla to show its Bitcoin holdings at the current fair market price.
Companies in the past declared their Bitcoin holdings based on the most minimal price valuation between acquisition and assessment without considering subsequent value growth. Digital assets reported by Tesla in their financial statements reached $1.08 billion following the implementation of the FASB rule change, which increased their previous numbers from $184 million.
The net income results for Q4 showed a $600 million Bitcoin benefit as a result of the new accounting measures, according to CFO Vaibhav Taneja.
Of the Bitcoin Tesla possesses within its portfolio, the company now holds approximately 9,720 BTC. Corporate holders will now have the opportunity to show digital assets at market values in their balance sheets through a FASB rule modification that starts in mid-December 2024.
This article first appeared on GuruFocus.
