The fair market value of the company’s Bitcoin holdings was $191 million at the end of 2022, according to Tesla’s latest filing with the U.S. Securities and Exchange Commission. In addition, billionaire Elon Musk’s electric car company recorded an impairment loss of $204 million due to bitcoin price volatility.
the fair value of Tesla’s digital assets and its bitcoin
Tesla (Nasdaq: TSLA), Elon Musk’s electric vehicle company, on Monday filed its annual report with the U.S. Securities and Exchange Commission (SEC) for the year ended December 31, 2022.
The filing shows that Tesla’sfair market value of its BTCholdings was $191 million at the end of 2022, while its book value was $184 million, Bitcoin.com News previously reported.” As of December 31, 2022 and 2021, the book value of digital assets held was $184 million and $1.26 billion, respectively, reflecting cumulative impairments of $204 million and $101 million for each period.” The company elaborated.
The fair market value of such digital assets held at December 31, 2022 and 2021 was $191 million and $1.99 billion, respectively.
The filing also states that during the two years ended December 31, 2022, Tesla “purchased and/or received insignificant amounts and $1.5 billion, respectively, of digital assets.”
The electric car company invested $1.5 billion in bitcoin in the first quarter of 2021, but sold 75% of its holdings in the second quarter of 2022. The company also accepts the meme cryptocurrency Doogie Coin (DOGE) for some of its products, accounting for an “insignificant amount” of its digital assets, as stated in the SEC filing.
Tesla took a $204 million impairment loss from Bitcoin
The electric vehicle company explained that digital assets are considered “indefinite-lived intangible assets under applicable accounting rules.” Therefore, “any decrease in their fair value below our carrying value for such assets at any point after their acquisition would require us to recognize an impairment loss,” Tesla explained, adding.
For the year ended December 31, 2022, we recognized a $204 million impairment loss attributable to changes in the carrying value of our bitcoins and a $64 million gain associated with certain conversions of bitcoins to fiat currency by us.
Since itsacquisition of BTC, Tesla has sold its bitcoin only once, and that was in the second quarter of 2022. The company sold 75% of its bitcoin holdings, adding $936 million in cash to its balance sheet; CEO Elon Musk explained at the time that the company was “certainly open to increasing our bitcoin holdings [in the future]” and that the sale was “given the cobit outage in China.” He noted that it stemmed from concerns about the company’s overall liquidity.
Tesla’s SEC filing also stated.
We may increase or decrease our holdings of digital assets at any time based on the needs of our business and our view of market and environmental conditions.
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