Tesla Takes Advantage of New Accounting Standard, Books $600M Gain from Bitcoin Holdings in Q4
Tesla (TSLA) capitalized on a new accounting rule that allows for digital assets to be marked-to-market, reflecting a significant shift in how the company reports its Bitcoin holdings.
In its fourth-quarter earnings, Tesla revealed that the value of its 9,720 Bitcoin surged to $1.076 billion by the end of 2024, up from just $184 million in previous reports. This adjustment led to a $600 million increase in its GAAP income, contributing to a total of $2.3 billion in Q4 GAAP income.
This valuation change is made possible by new rules from the Financial Accounting Standards Board (FASB), which require companies holding digital assets to mark those assets to market starting in 2025. Tesla, however, chose to apply this rule earlier, boosting the value of its Bitcoin holdings before the official deadline.
Previously, companies were required to report their digital assets based on the lowest value during their ownership period, which kept potential gains from being reflected on financial statements.
Tesla’s adjusted earnings per share (EPS) for the quarter came in at $0.73, slightly missing the consensus estimate of $0.76. However, the gain from Bitcoin holdings only impacted GAAP income, not adjusted EPS. Tesla’s stock rose 3.5% in after-hours trading following the earnings report.
With its 9,720 Bitcoin holdings, Tesla ranks as the sixth-largest publicly traded company holding Bitcoin, according to Bitcoin Treasuries.
