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  • Tesler revealed on Monday that it has put $1.5 billion into Bitcoin and may soon accept the crypto currency from buyers of its electric cars.

  • It's right up Tesla boss Elon Musk Ali is a wink tow, anti establishment types who love the idea of a digital currency that's beyond the reach of any government.

  • The news pushed up the value of Bitcoin to a new record now approaching $50 and it further boosted the market capitalization of Tesla, which is already at more than $800 billion worth more than the next 10 or so car manufacturers combined.

  • It raises a geeky but important question to today's accounting rules.

  • Mean Musk's company won't mark up this week's game or any subsequent uplift in the value of its Bitcoin holdings.

  • The reported value on testers books can only go down.

  • That's because the only place Cryptocurrencies fit into accounting at the moment is as what's called intangible assets.

  • That's usually a category for squishy things like brands and trademarks, and the rules only allow them to be written down in value, never up.

  • But Bitcoin is a bit like virtual cash or a non government currency.

  • If you don't like those analogies, it's akin to a speculative investment.

  • Some see it as a kind of hedge against inflation, a digital version of gold.

  • But the accounting doesn't get close to matching any of those things.

  • Corporate reports could become seriously misleading if crypto investments by companies catch on, the accounting will need a rethink.

Tesler revealed on Monday that it has put $1.5 billion into Bitcoin and may soon accept the crypto currency from buyers of its electric cars.

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Breakingviews TV: Crypto-Tesla a challenge to accounting rules

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    林宜悉 posted on 2021/02/11
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