Tesla Recorded a $600M Gain in Q4 by Marking Up Its Bitcoin Holdings’ Value.

Tesla Capitalizes on New Accounting Rule, Sees $600M Gain from Bitcoin Holdings in Q4

Tesla (TSLA) has benefited from a new accounting rule that permits companies to mark their digital assets to market, as reflected in its fourth-quarter earnings report.

The company reported that its 9,720 Bitcoin holdings were valued at $1.076 billion as of the end of 2024, a significant increase from the $184 million valuation the company had maintained for several quarters. This adjustment contributed to a $600 million boost to Tesla’s GAAP income. For context, Tesla’s total GAAP income for Q4 stood at $2.3 billion.

The change stems from new guidelines introduced by the Financial Accounting Standards Board (FASB), which now requires corporate holders of digital assets to report them at market value starting in 2025. Tesla, however, chose to apply the new rule ahead of the mandatory deadline.

Before this new accounting rule, companies were required to report the value of digital assets based on the lowest valuation during their period of ownership, which meant that any potential gains were not reflected on balance sheets.

Tesla’s adjusted earnings per share (EPS) for Q4 came in at $0.73, falling short of analysts’ expectations of $0.76. The $600 million gain on Bitcoin, however, was recorded for GAAP purposes and did not affect adjusted EPS. Following the earnings report, Tesla’s stock rose by 3.5% in after-hours trading.

Tesla continues to hold 9,720 Bitcoin, making it the sixth largest publicly traded company in terms of Bitcoin holdings, according to data from Bitcoin Treasuries.