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  • May 2021 (Revised September 2021)
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Accounting for Bitcoin at Tesla

By: Charles C.Y. Wang and Siyu Zhang
  • Format:Print
  • | Language:English
  • | Pages:20
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Abstract

On February 8, 2021, Tesla revealed, through its 10-K filing to the Securities and Exchange Commission (SEC), that it had purchased $1.5 billion of Bitcoin, totaling 7.5% of the company’s cash, and that it planned to accept payments in the cryptocurrency soon. These announcements came at the heel of the sixth straight quarter of positive GAAP profit and the first profitable fiscal year in the company’s history. The revelation about Tesla’s Bitcoin purchases were met with mixed reactions by stock investors and market participants. This case centers around the accounting treatment of Bitcoin at Tesla: what does the accounting treatment say about Bitcoin as an asset, and what are its implications for Tesla’s profitability under the Generally Accepted Accounting Principles or Elon Musk’s compensation incentives? The case also raises questions about whether investing in Bitcoin is consistent with the company’s strategy or could be deemed a form of speculation, and whether Musk’s public communications about cryptocurrencies (e.g., his cryptocurrency-related “Tweets”) constitute a form of market manipulation.

Keywords

Bitcoin; Accounting; Currency; Communication Intention and Meaning; Strategy; Investment Portfolio; Emerging Markets; Risk and Uncertainty; Value Creation

Citation

Wang, Charles C.Y., and Siyu Zhang. "Accounting for Bitcoin at Tesla." Harvard Business School Case 121-074, May 2021. (Revised September 2021.)
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About The Author

Charles C.Y. Wang

Accounting and Management
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Related Work

    • May 2021 (Revised September 2021)
    • Faculty Research

    Accounting for Bitcoin at Tesla

    By: Charles C.Y. Wang and Siyu Zhang
    • December 2021 (Revised October 2023)
    • Faculty Research

    Accounting for Bitcoin at Tesla

    By: Charles C.Y. Wang
Related Work
  • Accounting for Bitcoin at Tesla By: Charles C.Y. Wang and Siyu Zhang
  • Accounting for Bitcoin at Tesla By: Charles C.Y. Wang
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