GAAP another roadblock to Bitcoin acceptance

There are no general guidelines in the Generally Accepted Accounting Principles (GAAP) on how companies should account for digital assets. They are not deemed financial assets, but intangible assets. Therefore, when the value of Bitcoin goes down, companies that hold this intangible asset must acknowledge the loss because it is now impaired and write it down.

But, should Bitcoin recover, the firm cannot adjust their books to reflect this recovery. They can only realize the gain by selling the Bitcoin. All part of the arcane world of GAAP and accounting for intangible assets.

That is why so few firms (Tesla) have digital assets on their books. Few companies want the accounting and reporting hassle.

We still are far, far away from the time when the big players — banks, accounting firms, and governments provide some ‘tangible’ support to the Bitcoin market.