Hello everyone, Welcome back to another blog.
The topic of this blog is very interesting. I was watching a podcast featuring an accountant from the USA, and he mentioned something really cool. So, I did my research on it and found it quite interesting. This could potentially drive the price of Bitcoin to the next level.
For companies, until now, Bitcoin has been treated as an intangible asset. This means when a company bought Bitcoin, it was recorded on the balance sheet at the purchase price—or, in trading terms, the Entry Price.
The frustrating thing about this rule was that if the value of the asset increased, it wasn’t recognized. However, if the price decreased, the valuation had to be lowered.
In simple terms, if you were in profit, you couldn’t show it in the books, but if the price dropped and you were in a loss, you had to record it in the books as an expense on the company’s income statement.
Even if the price of Bitcoin later recovered or rose above the original purchase price, the company could not reverse the impairment charge. The Bitcoin would continue to be valued
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2 Responses
I found that article awesome and easy to understand , thankyou Silver Wolf
This is a game changer