Latest news with #FASB
Yahoo
16 hours ago
- Business
- Yahoo
Are outdated tax laws crippling Bitcoin mining? Miners say it's time for change
Are outdated tax laws crippling Bitcoin mining? Miners say it's time for change originally appeared on TheStreet. In the evolving landscape of Bitcoin mining, one regulatory issue has quietly become a flashpoint for operators: the way mining income is taxed. Unlike traditional commodity producers, Bitcoin miners are taxed the moment they generate new coins—even before any sale takes place. 'If you're mining gold, you don't pay tax until you sell it,' said Beau Turner, CEO of Abundant Mines, in a recent conversation with TheStreet Roundtable's Alp Gasimov. 'But for Bitcoin miners, the IRS treats mined coins as regular income immediately, creating unnecessary sell pressure.' That distinction could soon be challenged. Turner points to the Financial Accounting Standards Board (FASB)'s recent decision to allow companies like Michael Saylor's Strategy to use fair value accounting for Bitcoin as a sign of shifting tides. He sees a similar path for the mining sector—if regulators are willing to view mined Bitcoin the same way they view mined commodities. Currently, Bitcoin miners face a two-part tax burden: first, regular income tax when coins are mined, and second, capital gains tax if the price increases before sale. This dual structure pressures many miners to sell prematurely—just to cover tax obligations—contributing to volatility and undermining long-term holding strategies. 'If you've got a tax bill but you haven't sold your coin yet, you might have to sell it just to pay the tax,' Turner explained. 'That wouldn't happen if we were treated like other commodity producers.' The implication is clear: align Bitcoin taxation with commodity norms, and miners could hold longer, reducing market supply and stabilizing price dynamics. When asked why this wasn't standard from the outset, Turner pointed to the slow-moving nature of regulatory bodies. Even small changes often require significant industry momentum and political backing. 'We're not asking for special treatment,' he emphasized. 'Just to be treated like any other commodity business.' That framing could gain traction, especially as mining gains visibility in political circles. Turner noted the involvement of 'the Trump brothers' in the mining sector as a possible catalyst for policy momentum, suggesting that bipartisan awareness is growing. Are outdated tax laws crippling Bitcoin mining? Miners say it's time for change first appeared on TheStreet on Jun 19, 2025 This story was originally reported by TheStreet on Jun 19, 2025, where it first appeared.
Forbes
6 days ago
- Business
- Forbes
Should We Standardize Non-GAAP Reporting?
There is a weak case at best for standardizing non-financial KPIs such as same store sales. Leave the rest of the existing regulation as is. Standardizing Regulators have long struggled with whether and how to standardize non-GAAP reporting. The SEC, via Regulation G and additional rules in 2016, put in common-sense rules on non-GAAP numbers requiring firms to reconcile the non-GAAP number to the GAAP number. In addition, the SEC requires that: (i) the firm cannot present misleading non-GAAP numbers, defined mostly as excluding normal, recurring, cash operating expenses necessary to operate a firm's business; (ii) the firm cannot present inconsistent non-GAAP measure across periods; (ii) the non-GAAP measure cannot exclude gains; and (iv) non-GAAP numbers should clearly label the adjustment. The policy question is whether we should go beyond this? The FASB has a proposal asking whether they need to do something about standardizing financial KPIs. One hypothesis would be that non-GAAP numbers are not all useless or fudged in that the exclusions and inclusions signal information (however costly). There is a fair amount of academic research supporting this perspective. Some complain that GAAP has become excessively restrictive, and we need to give firms leeway to communicate the idiosyncratic aspects of the business model via non-GAAP numbers. The opposing camp would argue that these adjustments to GAAP numbers are opportunistic, and the policy maker must protect the uninformed investors from such opportunism. So, what should the policy maker do? The reality, I suspect, lies somewhere in the middle. Some exclusions potentially make business sense. One-time items, say a litigation settlement, potentially mess with an analyst's projection of continuing performance. As long as that exclusion is disclosed, I can live with that exclusion. However, excluding depreciation, interest expense and taxes, which are normal business expenses, personally make little business sense to me. I often joke in class with my students, 'imagine a world where the student does not pay interest on student loans, does not pay NYC city, NY state and federal taxes, and pays no rent (loosely the capacity cost or DA in EBITDA). Of course, you are rich after these exclusions.' I suggest a mid-way compromise: (i) leave non-GAAP numbers as is, as long as the firm reconciles the non-GAAP number to the GAAP number and follows the SEC's earlier guidance on consistency; (ii) if there is no comparable GAAP number, such as same store sales or the number of subscribers and customers, there may be some value to standardizing what same store sales might look like, for instance, in the retail industry. Consider same store sales disclosure for Home Depot in the 10-K of 2024 and compare that to Lowes, its closest competitor. Home Depot reports something called, 'comparable sales,' defined as: 'Comparable Sales. Comparable sales is a measure that highlights the performance of our existing locations and websites by measuring the change in net sales for a period over the comparable prior period of equivalent length. Comparable sales includes sales at all locations, physical and online, open greater than 52 weeks (including remodels and relocations) and excludes closed stores. Retail stores become comparable on the Monday following their 52 week of operation. Acquisitions are typically included in comparable sales after they have been owned for more than 52 weeks. Our comparable sales results for fiscal 2024 exclude the 53rd week and compare weeks 1 through 52 in fiscal 2024 to the 52-week period reported for fiscal 2023. The method of calculating comparable sales varies across the retail industry. As a result, our method of calculating comparable sales may not be the same as similarly titled measures reported by other companies. Total comparable sales decreased 1.8% in fiscal 2024, reflecting a 1.0% decrease in comparable customer transactions and a 0.9% decrease in comparable average ticket compared to fiscal 2023.' Lowes reports, in its annual report for 2024, 'A comparable location is defined as a retail location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable in the month of its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to close is no longer considered comparable as of the beginning of the month in which we announce its closing. Operating locations which are sold are included in comparable sales until the date of sale. Comparable sales include online sales, which positively impacted comparable sales in fiscal 2024, fiscal 2023, and fiscal 2022 by approximately 50 basis points, 25 basis points, and 45 basis points, respectively. The comparable sales calculation for fiscal 2022 was calculated using sales for a comparable 52-week period.' Even for two very similar, closely tracked peers such as Home Depot and Lowe's, there are subtle differences in comparability in the 'comparable' sales numbers: One of the challenges of standardizing non-financial KPIs is that these KPIs are likely to differ depending on the industries using them. Retail uses same store sales. Streaming services and cable companies report number of subscribers. Airlines use available seat miles. Does the rule maker want to get into the business of regulating KPIs by industry? Standardization can cause new problems Trevor Harris, emeritus professor at Columbia Business School, my colleague worries, 'standardization of non-GAAP numbers is going to cause more issues. I think part of the general problem is that people want everything in a summary statistic which cannot really work, and we assume all investors use the measures being reported. So, part of the answer is to put some of the responsibility back on investors instead of adding more regulation which will never cover everything. When I created economically consistent measures in Model Ware at Morgan Stanley, there were many cases where I had to arbitrate and provide consistency. No regulation can deal with all the idiosyncrasies in complex companies. Another dimension of this is why is comparability a holy grail? Lowes and Home Depot are more similar, but not homogenous. If people cannot adjust for 52 versus 53 weeks, why add more burden on the companies if they don't operate that way?' An ex-standard setter, who wished to stay anonymous, points out another important wrinkle - the constant pressure from industry to adopt income-increasing metrics or rules that make companies look good: 'If I was in charge of the FASB, I might think twice about taking on such a project. An example was earnings per share. It was the first GAAP metric and at one time was viewed as critical to investment decision making. Because many believed it was critical to investment decision making, the gaming of the standard became a popular sport. So much so, that the FASB was constantly trying to issue guidance to address the most recent scheme to boost EPS. The literature became voluminous and complex. A former FASB Chairman told me that he believed the EPS standard was one of the FASB's biggest mistakes and that in his view the FASB should not set standards for how to compute metrics used by investors.' In sum, there is a weak case at best for some kind of standardization of non-financial KPIs. On balance, I suggest we leave Regulation G and the SEC's 2016 rules as is. In my view, these rules strike a reasonable balance between giving firms discretion to tell their story without giving investors information to detect managerial opportunism.
Yahoo
20-05-2025
- Business
- Yahoo
AICPA appoints Rahul Gupta as chairman of FinRec
The American Institute of CPAs (AICPA) has appointed Rahul Gupta as the chairman of its Financial Reporting Executive Committee (FinREC). Based in Chicago, Gupta is an audit partner in Grant Thornton's National Office as well as a principal at Grant Thornton Advisors, where he assists teams and clients with complex accounting issues and develops thought leadership on accounting standards. Gupta has been contributing to FinREC since May 2022 and is also a member of the AICPA's Digital Assets Working Group. His prior experience includes a significant role at the Financial Accounting Standards Board (FASB) as a practice fellow and senior project manager, where he helped enhance U.S. GAAP with his technical knowledge and practical insights. Gupta's role also involves liaising with key standard-setting bodies such as FASB, the International Accounting Standards Board (IASB), and the Securities and Exchange Commission (SEC). FinREC outgoing chair and a managing director at Deloitte Mark Crowley said: 'Rahul brings extensive experience and significant acumen in accounting standards to FinREC,' 'He has made substantial contributions as a volunteer on FinREC and other AICPA working groups and is an excellent choice to lead FinREC.' AICPA's director of accounting standards Kim Kushmerick said: 'Having worked with Rahul for many years, we are fortunate to have someone with his knowledge and experience to chair FinREC.' FinREC's mission is to articulate the AICPA's technical policies on financial reporting standards and act as its voice on these matters. The committee aims to serve the public interest by fostering improvements in financial reporting. Earlier in May 2025, the AICPA announced the retirement of Carl Peterson, its vice-president for small firm interests, on 30 June 2025. "AICPA appoints Rahul Gupta as chairman of FinRec" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
13-05-2025
- Business
- Yahoo
FASB clarifies accounting acquirer guidance in business combinations
The US Financial Accounting Standards Board (FASB) has released an Accounting Standards Update (ASU) to enhance the requirements for identifying the accounting acquirer in FASB Accounting Standards Codification Topic 805, Business Combinations. The update is based on a recommendation from the Emerging Issues Task Force (EITF). It revises existing guidance for determining the accounting acquirer in transactions primarily involving the exchange of equity interests, where the legal acquiree is a variable interest entity meeting the definition of a business. The amendments require entities to apply the same factors used in other acquisition transactions to identify the accounting acquirer. FASB chair Richard Jones said: 'The new ASU is the first recommendation from the recently reconstituted EITF to be issued as a final standard, and we thank the group for providing a path forward in making financial reporting in this area more comparable and decision useful for investors.' Additionally, FASB is seeking public feedback on a proposed ASU that provides guidance on accounting for debt exchange transactions involving multiple creditors. The proposal, also recommended by the EITF, is open for stakeholder review and comment until 30 May 2025. Under current generally accepted accounting principles, entities must determine whether a modified or exchanged debt instrument should be treated as a modification of the existing obligation or as the issuance of a new one, with the old obligation extinguished. The proposed ASU clarifies that certain debt instrument exchanges should be recognised as the issuance of a new debt obligation and the extinguishment of the existing one. FASB believes this update will enhance the decision-usefulness of financial reporting by ensuring economically similar transactions are accounted for consistently. It also aims to reduce varied practices in accounting for such exchanges. "FASB clarifies accounting acquirer guidance in business combinations " was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
09-05-2025
- Business
- Yahoo
A Surprising Takeaway From Tesla's Disappointing Earnings Report and What It Means for Bitcoin
Tesla is the fifth biggest corporate Bitcoin investor with more than 11,500 coins. More public companies own Bitcoin than ever before. Changes in reporting rules have made corporate crypto investing more attractive. Tesla (NASDAQ: TSLA) has had a tough start to the year. Its stock is down almost 30% year to date, and disappointing is, frankly, a polite word to use about its first-quarter results. Its revenue and earnings per share missed analyst expectations, and its automotive revenue fell 20% year on year. But there's been plenty of coverage of Tesla's troubles. If you're a crypto investor, there's a less-reported figure to note in Tesla's recent earnings: Its crypto holdings are currently worth about $1.1 billion. It holds 11,509 Bitcoins (CRYPTO: BTC) and it hasn't sold any since 2022. The balance sheet value of its crypto stash shot up dramatically at the end of last year because of changes in accounting rules. And that rule change is good for cryptocurrency adoption. The Financial Accounting Standards Board (FASB) issued new guidance in 2023 because investors complained that the old rules distorted the value of digital asset holdings. As of December 2024, public companies have to report the fair value of any crypto assets they hold in each reporting period. That's a big change. The old rule applied something called historical cost accounting -- a very conservative way of attributing value -- to digital assets. This handicapped companies that held crypto. It meant public companies had to list crypto holdings on their balance sheets at their lowest price, unless they sold them. The value of any crypto holdings would initially reflect the purchase price and then get written down if prices fell. But the value could only go down -- subsequent recoveries didn't make any difference. For example, Tesla bought its Bitcoin in early 2021 at about $30,000 per coin. At the end of 2022, Bitcoin's price fell below $16,000. It was stuck at $15,987 on Tesla's balance sheets for quite some time. Tesla listed its Bitcoin stash at a steady $184 million in every quarterly report from December 2022 to December 2024. The price rose considerably, but only that low point showed in Tesla's earnings. That changed for Q4 2024 when Tesla applied the new rules and the value of its coins jumped to more than $1 billion. It recorded a $600 million gain on its balance sheet -- almost a quarter of its $2.3 billion net income for the quarter. Tesla and Bitcoin? It's complicated. In early 2021, Tesla bought its first Bitcoin and said it planned to accept Bitcoin payments. It was one of the first big companies to really commit to crypto, and Bitcoin's price subsequently surged to a new high. A few months later, Chief Executive Officer Elon Musk backtracked and said Tesla would halt plans for Bitcoin payments because of environmental concerns. Tesla went on to sell 75% of its crypto in the second quarter of 2022. Even so, it is still the fifth biggest corporate holder of cryptocurrency today, per Bitwise's latest market review. Tesla owns about 0.06% of the 21 million Bitcoins that will be produced. If you're worried Tesla will sell its holdings and rock the market again, take solace from the fact that Tesla doesn't have the dominance it did four or five years ago. It's still an important player, just not as important. According to Bitwise, 12 new public companies bought Bitcoin in Q1 2025, taking the total to 79. Together, those companies hold a total of 688,000 Bitcoins. It also says public companies bought over 95,000 Bitcoins in Q1 (16% of the total holdings). The change in reporting rules is only one reason for the shift. Companies are also looking to diversify their investments and hedge against inflation and other global uncertainties. It helps that Strategy -- the software company that's built up a veritable trove of Bitcoin -- has gained more than 200% since last May. Even so, investing in cryptocurrency is risky, whether you are a listed company or a private investor. Company balance sheets will now reflect both the ups and downs in prices. It's also important to understand any tax consequences. And it is still a volatile asset class. If prices fall, it will hurt a company's finances, no matter what accounting rules apply. There weren't many winners in Tesla's most recent earnings reports. But corporate Bitcoin buying is one. Not only because it gave a much-needed boost to the electric car company's income, but also because it highlights the advantages of the new accounting rules. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $303,566!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $37,207!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $623,103!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of May 5, 2025 Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy. A Surprising Takeaway From Tesla's Disappointing Earnings Report and What It Means for Bitcoin was originally published by The Motley Fool
