SEC rejected MicroStrategy's Bitcoin accounting practices

The Business intelligence firm has reported it used non-GAAP methods of calculating figures for its Bitcoin buy excluding the "impact of share based compensation expense and impairment losses and gains on sale from intangible assets." 

Business intelligence firm MicroStrategy reportedly acted contrary to the Securities and Exchange Commission's accounting practices for its crypto buying. 

The sec declared on Thursday the regulatory body objected to MicroStrategy declaring information related to its Bitcoin buying based on non-GAAP, or Accepted accounting principles. The business intelligence firm has been reporting it used these techniques of calculating figures for its BTC purchase excluding the "impact of share-based compensation cost and impairment losses and gains on sale from intangible assets" 

GAAP rules are not made for reporting the value of cryptocurrencies, MicroStrategy has bought 124.391 BTC as of DEC 30 expressed more than $4.7 billion in value across several buys totaling $3.8 billion since Aug 2020. The company expressed it used non-GAAP practices to exclude "cumulative impairment losses" from the cost and based the value of its holding on the market price of 1 BTC at 4:00 EST on the last day.

According to Microstrategy BTC buying in July 2021 it "believes that these non-GAAP financial measures are also used to investors and analysts in comparing its performance across reporting consistently." The SEC declares MicroStrategy should "remove this adjustment in future filings."

MicroStrategy fell 17.8% in the last 24 hours to reach a six-month price of $375. The drop might have been affected by BTC also falling to a six-month low as the crypto asset dip under $38,000.

Read: MicroStrategy purchases additional 7,002 Bitcoin in $414.4 million