In the absence of FASB directive, not sure which planet (guess) the AICPA was on when defaulting to treating #Bitcoin and crypto as indefinite-lived intangible assets. Cash? Clearly not. Not legal tender. Just bizarre to book realized gains as an offset to OPERATING expense. 1/
Declines below cost will be tested for "impairment" and when written down will no doubt be explained away as "one time." The room for abuse here is ripe. Why not treat crypto as a trading security, compelling marking realized and unrealized gains and losses through BOTH 2/
the income statement & the balance sheet? Take note of the way Berkshire Hathaway accounts for realized and unrealized gains and losses and makes clear they DO NOT consider them as operating. Lonely crowd. To the extent crypto rises in price, we now have the classic cookie jar.3/
The accountants will explain crypto can't be treated as an investment/trading security because there is no contractual right to receive cash upon sale. Ditto stocks if there is no bid, but hey. Instead, we have CEOs saying they sold crypto to prove exchangeability for cash. 4/
Regardless of your take on #Bitcoin as investment or speculation, the accounting treatment errs. When the Circus Circus Casino was named in 1968, they had no idea how much more appropriate the name would have been in the modern day board room. Some at least. Send in the clowns.
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