The US regulatory body raised an issue against the Microstrategy firm about their reporting system of Bitcoin purchase under non-GAAP.
MicroStrategy is a business intelligence firm. In this crypto industry, this firm is known for its bullish nature to buy Bitcoin. Since Q4 2020, this firm is adding Bitcoin to the balance sheet of the company.
On 21 January, Bloomberg published a report on Microstrategy firm reporting a mistake on which the SEC agency raised the issue.
According to the report, the SEC agency sent a letter to the Microstrategy firm on Thursday and explained that Bitcoin purchase reporting is under non-GAAP.
In simple meaning, Microstrategy’ technique to report on its volatile assets purchase is not under system rule, where the firm is using those methods of calculating figures for its Bitcoin purchases, which is excluding the effect “of share-based compensation expense and impairment losses and gains on sale from intangible assets” — essentially, negating some of the effects of the volatility of the crypto market.
However, few experts’ points of view claimed that GAAP is not made to report crypto purchases. So here reporting by the firm is right to some extent from the point of buy value & current value understanding for the public. Right now the firm holds a total of 124,391 Bitcoins, as per 30 December reporting.
In July 2021, Microstrategy firm stated on the non-GAAP measures used and claimed that it gives clarity to the people on the holdings and its value.
“(We) believe that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods consistently.”
Now, Reportedly the SEC agency ordered to remove such adjustment in future filings.
MicroStrategy CEO on Bitcoin holdings
Recently Michael Saylor, CEO of Microstrategy, appeared in an interview. Through the interview, Michael said that he is a Bitcoin bull and he will never deviate from the initial pledge to make the Microstrategy a multi-billion Bitcoin company.
Earlier this, Michael shared his idea with the company employees and said that they should start their own idea to use Bitcoin or will give it to a reputed company to use the Bitcoins, to generate revenue from the Bitcoin holdings.
Read also: Binance grabbed financial success under regulatory scrutiny: Reuters
