In a regulatory filing, Strategy (MSTR) disclosed that the fair value of the company’s bitcoin is reflected within the consolidated balance sheets each reporting period-end. Its unrealized gain on digital assets for the quarter ended June 30 was $14.05B, which will result in a net gain for the quarter ended June 30, partially offset by a related deferred tax expense of $4.04B, the company disclosed. “Upon adopting ASU 2023-08 on January 1, 2025, the company is no longer required to account for its bitcoin under a cost-less-impairment accounting model and it no longer establishes a deferred tax asset related to bitcoin impairment losses. Instead, the Company establishes a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of its bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin increase or decrease the deferred tax liability,” the filing stated.
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