Tesla Reports Loss In Bitcoin Investment To The Tune Of USD 170 Million

0
151
Tesla
Tesla

Tesla, the EV Manufacturer, reported a loss of a massive USD 170 M in its bitcoin investment, as per the third quarter mandatory filing report with the SE Commission. As per filed report before the United States Securities and Exchange Commission, USD 1.5 M was invested by the company in BTC in 2021.

The fair value of the investment suggests, the firm is at a loss of around USD 170 M in the first nine months of this year noting that it also gained around USD 64 M through the conversion of some of the Bitcoins into fiat money. Fiat money is a government-issued currency, which is not backed by gold or silver. Net Loss for the company after adjusting the gain of USD 64 M stands at USD 106 M.

Tesla’s Core Business Grows 169 Percent.

The reported mandatory filing with the S E Commission for Q3 shows that the company’s core operation has grown 169 percent on year on year basis. It was worth USD 3.3 B in the third quarter filing of 2021. From there it has grown by 169 percent. As per Tesla, the balance sheet shows its Bitcoin holding to be valued at USD 218.

The new accounting rule considers digital assets as indefinite-lived intangible assets. It is done so because digital assets are initially measured at a cost, since there is no limit on their useful life of it they are defined as indefinite-lived intangible assets. They are not subject to amortization. Owing to this any decrease in the value of it Bitcoin Holding Tesla will be required to file impairment charges and the firm cannot make revisions in upward price till the sale is made. The firm can reduce its tax liabilities by deducting its loss against the profit. While capital gains are not taxed till the sale.