Company: MSTR
Filing Date: 2025-04-07
Form Type: 8-K
Source: 0001193125-25-073989
Chunk: 17

Company: Strategy Inc
Filing Date: 2025-04-07
Form: 8-K
Item: Item 8.01
Chunk 17
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 cost, upon adoption of Accounting Standards UpdateNo. 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): (“ ASU2023-08”)on January 1, 2025, any subsequent increases or decreases in fair value are recognized as incurred in the Consolidated Statements of Operations, and the fair value of the Company’s bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end. Our unrealized loss on digital assets for the quarter ended March 31, 2025 was $5.91 billion, which we expect will result in a net loss for the quarter ended March 31, 2025, partially offset by a related income tax benefit of $1.69 billion.

Upon adopting ASU2023-08, the Company is no longer required to account for its bitcoin under a cost-less-impairment accounting model and it no longer establishes a deferred tax asset related to bitcoin impairment losses. Instead, the Company establishes a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of its bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin will increase or decrease the deferred tax liability.

The following table presents a roll-forward of the Company’s bitcoin holdings, including additional information related to the Company’s bitcoin purchases and the change in digital asset carrying value, during the quarter ended March 31, 2025.

                                                                     Digital                             Digital Asset Carrying                                   Approximate              
                                                                     Asset                               Value (in thousands)                                     Average                  
                                                                     Original Cost                                                                                Purchase                 
                                                                     Basis                                                                                        Price Per                
                                                                     (in thousands)                                                                               Bitcoin                  
 ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Balance at December 31, 2024 (before adoption of ASU 2023-08)      $                   27,968,248      $                           23,909,373      447,470      $                62,503  
  Cumulative effect upon adoption of ASU 2023-08                                                                                     17,881,048                                            
  Balance immediately following adoption of ASU 2023-08              $                   27,968,248      $                           41,790,421      447,470      $                62,503  
  Digital asset purchases                                                                 7,661,663                                   7,661,663       80,