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CCFCN: What are the GAAP for Digital Assets?

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Avatar for cmoneyspinner
Written by   78
4 months ago

I learned a new word reading an article on Read.Cash. So when I saw this Bloomberg business ar least I had some idea of what they were talking about. The business term that I learned was “unicorn”.

"... a unicorn is a privately held startup company valued at over $1 billion. ..."

REFERENCE: The 4 unicorns Valued over $1 billion in Africa ~ https://read.cash/@Macronald/the-4-unicorns-valued-over-1-billion-in-africa-a9a9932a

That's why while perusing business news I was able to understand this headline.

The Accountants Say Bitcoin Can’t Play With the Unicorns: The Accounting Principle That Helps Keep Bitcoin From Broader Acceptance | Bloomberg

~ https://www.bloomberg.com/opinion/articles/2021-07-11/the-accounting-principle-that-helps-keep-bitcoin-from-broader-acceptance

EXCERPT:
“Accounting firms are restricting corporations from holding the cryptocurrency as assets even as they give free rein to venture capital firms — such as SoftBank Group Corp. — to invest in equally risky and volatile unicorns. … That mindset is getting in the way of the broader adoption of Bitcoin and other cryptos because companies holding such digital currencies bear an accounting risk: big asset write-downs. … there are no official guidelines under the Generally Accepted Accounting Principles (GAAP) over how companies should account for digital assets.”

The article says that companies like Microstrategy and Tesla own bitcoins but they are the “exception”; not the rule; and that only a small percentage of business executives plan to invest in bitcoin because of advice from their accountants.

As one of the “little people” trying my hand at learning how to invest cryptocurrency , I am not exactly all that upset that the executives of major corporations don't want to buy Bitcoin.

Should I be? 🤔?

♦♦♦♦♦

Previous Post in CCFCN Series:

CCFCN = Curated Content For Crypto Newbies

CCFCN: Ways to convert BTC to Fiat without KYC

  • Check out my other posts for crypto newbies on Noise.Cash.



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Avatar for cmoneyspinner
Written by   78
4 months ago
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