Tesla reports $600 million bitcoin profit jump after digital assets rule change
A recent change in the rules for how companies account for digital assets led Tesla to report a $600 million mark-to-market gain.
Tesla's bitcoin holdings led to a big pop in reported net income for the fourth quarter because of a new rule change in how companies account for digital assets.
After showing a carrying value of $184 million in digital assets for the prior four quarters, the number suddenly jumped to $1.08 billion in the December period, Tesla reported in its earnings release on Wednesday.
The increase followed a recent policy change from the Financial Accounting Standards Board, which mandates that corporate digital asset holdings be marked to market each quarter starting at the beginning of 2025. Before the FASB rule change, companies owning bitcoin had to report their holdings at the lowest value recorded during their ownership, regardless of any subsequent price gain.
Tesla said in its earnings deck that the change resulted in an earnings per share boost of 68 cents in the quarter, and CFO Vaibhav Taneja noted on the earnings call that the net income increase was $600 million.