In Q3, software firm MicroStrategy, known for its biggest Bitcoin stash, has posted a $727,000 impairment charge on its BTC holdings.
The company suffered a minimal bitcoin impairment charge because of lowered volatility in the value of the world's biggest crypto exchange in the third quarter of this year.
s largest publicly traded corporate owner of bitcoin with total holdings of 130,000 bitcoins, said Andrew Kang, chief financial officer of the Virginia-based company.
The company had a loss of $727,000 by the end of the three-month period, and the loss for the same period last year was $65 million.
In the other case, MicroStrategy reported a $1 billion impairment loss for the nine-month period ending Sept. 30, 2022, while it was reported to be $684 million in the nine-month period ending Sept. 30, 2021.
The loss of an asset is caused by its volatility while the asset is being held by the owner, which causes an impairment loss. As Bitcoin's value depreciated this year, MicroStrategy's impairment losses piled up.
The earnings report attributed bitcoins to $3.983 billion and $2.532 billion, respectively, which reflect an average cost per bitcoin of about $30,639 and a market price per bitcoin of $19,480.51.
MicroStrategy said that it was encouraged by the Bitcoin policies mentioned by the Financial Accounting Standards Board on accounting issues. In October, the FASB affirmed that it had set clear accounting rules for companies holding digital assets, including BTC, and said it would require them to measure crypto assets at fair value.
The FASB policies are now adopted and implemented, CFO Kang said, and the fair value accounting will improve upon the current, unfavorable intangible accounting treatment applicable to bitcoin holdings and will promote additional institutional adoption of bitcoin as an asset class.