Micro-Strategy: Accounting for Crypto-currency

Micro-Strategy: Accounting for Crypto-currency Case Study Solutions


The Harvard Business School case study titled “Micro-Strategy: Accounting for Crypto-currency” by Jonas Heese and Annelena Lobb examines the accounting and reporting challenges faced by Micro-Strategy, a publicly traded software company, as it considers investing in Bitcoin as a treasury reserve asset.

Case Issue:

The company’s CEO, Michael Saylor, believes that Bitcoin can serve as a better store of value than cash, and is considering investing a significant portion of the company’s cash reserves in the crypto-currency. However, the company must determine how to account for the investment in Bitcoin on its financial statements and how to report the investment to stakeholders.

Case Analysis:

The case study highlights several key accounting and reporting challenges associated with investing in crypto-currency. One of the primary challenges is determining the appropriate accounting treatment for the investment. Crypto-currencies like Bitcoin are not recognized as legal tender by any government, and there is no established accounting guidance on how to account for these assets.

In addition to accounting challenges, there are also reporting challenges. Companies must determine how to disclose their crypto-currency investments in their financial statements, as well as how to communicate the risks associated with these investments to stakeholders.

Micro-Strategy has taken a unique approach to accounting for its Bitcoin investment. The company has classified Bitcoin as an “intangible asset,” and is accounting for the investment under the cost model. This approach is consistent with the accounting treatment used for other non-financial assets like patents and trademarks.

The company has also taken steps to communicate its investment in Bitcoin to stakeholders. In its quarterly earnings release, the company disclosed its Bitcoin holdings and discussed the risks associated with the investment. The company also held a webinar to provide additional information on its investment in Bitcoin.


The case study highlights the challenges associated with accounting for crypto-currency investments and communicating these investments to stakeholders. Micro-Strategy’s approach to accounting for its Bitcoin investment is unique, but may not be appropriate for all companies.

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To address the challenges associated with accounting for crypto-currency investments, companies should consider the following recommendations:

  1. Evaluate the appropriate accounting treatment for crypto-currency investments based on guidance from standard-setting bodies and regulators.
  2. Develop clear disclosure policies and procedures for communicating crypto-currency investments to stakeholders.
  3. Consider holding educational sessions for investors and other stakeholders to help them better understand the risks associated with crypto-currency investments.

By following these recommendations, companies can successfully account for crypto-currency investments and communicate these investments to stakeholders in a clear and transparent manner.

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