Company: MSTR
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001193125-25-262568
Chunk: 15

Company: Strategy Inc
Filing Date: 2025-11-03
Form: 10-Q
Item: Item 8
Chunk 15
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3, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company's bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025 on a prospective basis, with a cumulative-effect adjustment to the opening balance of retained earnings. Prior periods were not restated. As a result, the Company’s financial results for the three and nine months ended September 30, 2025 are not directly comparable to the financial results for earlier periods. See Note 3, Digital Assets, to the Consolidated Financial Statements, for further information.The adoption of ASU 2023-08 resulted in the following impacts as of January 1, 2025:  

            December 31, 2024

            Effect of the Adoption

            January 1, 2025

            Consolidated Balance Sheet
             
            As Reported

            of ASU 2023-08

            As Adjusted

            Digital assets
             
            $
            23,909,373

            $
            17,881,048

            $
            41,790,421

            Deferred tax assets

            1,525,307

            (1,165,605
            )

            359,702

            Deferred tax liabilities

            407

            3,969,065

            3,969,472

            (Accumulated deficit) retained earnings

            (2,166,876
            )

            12,746,378

            10,579,502

           Although the Company continues to initially record its bitcoin purchases at cost, subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, any increases or decreases in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, and the fair value of the Company’s bitcoin is reflected within the Company's Consolidated Balance Sheets