Tesla Records $101M Impairment Loss on Bitcoin Holdings for 2021

Tesla recorded around $101 million of impairment losses from changes in the value of its bitcoin holdings in 2021.Read MoreFeedzy

Tesla recorded a $101 million impairment loss from changes in the value of its bitcoin holdings in 2021.

CEO Elon Musk’s electric vehicle company disclosed the loss in a filing with U.S. Securities and Exchange Commission (SEC), explaining how its digital asset holdings could affects its profitability.

“In the year ended December 31, 2021, we recorded approximately $101 million of impairment losses resulting from changes to the carrying value of our bitcoin and gains of $128 million on certain sales of bitcoin by us,” the filing said.

The Financial Accounting Standards Board (FASB) demands that companies disclose if the value of their digital assets falls regardless of whether the loss is realized. No such stipulation exists if the value rises.

Tesla said it invested $1.5 billion in bitcoin in the first quarter of 2021. The market value of its bitcoin holdings as of the end of 2021 was $1.99 billion.

A year ago, the company announced that it had purchased $1.5 billion worth of bitcoin and thereafter began to accept it as a form of payment. In May, Musk went back on this announcement because of his concerns about the environmental impact of bitcoin mining.

Musk later said that the company would accept the crypto once it is confirmed that 50% of mining uses clean energy.

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