Accounting & Valuation Principles

8 min readarticleIncludes quiz · 2 questions

Until recently, US accounting rules required companies to mark Bitcoin down when the price dropped but did NOT allow them to mark it up when it recovered — creating an artificially pessimistic picture of Bitcoin holdings. New FASB rules now allow fair value accounting.

Accounting treatment depends on jurisdiction and evolving standards. Many treat BTC as an intangible asset measured at cost with impairment tests; some new rules allow fair value reporting—check current guidance with professionals.

Simple definitions:

  • •Cost basis: Purchase price (plus fees).
  • •Impairment: Write-down when fair value drops below carrying value.
  • •Fair value: Marking assets to current market price (when permitted).
Key Takeaway

Accounting standards are catching up to reality. Fair value accounting means corporate Bitcoin holdings now reflect actual market value, making Bitcoin treasury strategies more attractive to conservative companies.

Test Your Knowledge

2 questions · Passing score: 75%

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