Bitcoin on the balance sheet: how companies account for BTC under ASC 350-60, with journal entries

The short answer: Under ASC 350-60 a US GAAP company carries bitcoin at fair value on its own balance sheet line, separate from other intangibles and usually noncurrent. Price changes go through net income every reporting period. Each quarter the notes give units, cost basis and fair value, and each year they add a rollforward of the bitcoin balance.

Updated October 2026. FASB ASU 2023-08, the Strategy and Tesla 10-Q filings on sec.gov, PwC Viewpoint and the IFRS agenda decision linked below were checked on 2026-10-24. Not tax or audit advice.

Whether a company should hold bitcoin is a treasury question. This post is about what happens after the decision, once the holding is on the books: the balance sheet line, the income statement and cash flow lines it touches, a worked set of entries for one company across two quarters, the deferred tax that comes with fair value, and the note disclosures filled in with numbers. If you need the scope rules of the standard itself, start with our ASC 350-60 guide. If you need every transaction type (swaps, staking, gas), the crypto journal entries guide has them.

Where bitcoin shows up in the financial statements

ASC 350-60 applies to crypto assets that meet six criteria, among them being an intangible asset, giving no enforceable claim on underlying goods or assets, being fungible and not being issued by the reporting entity (FASB ASU 2023-08, paragraph 350-60-15-1, December 2023). Bitcoin held directly meets all six, and Strategy's filings account for its bitcoin under ASU 2023-08. The subtopic took effect for all entities for fiscal years beginning after December 15, 2024, including interim periods (350-60-65-1), so a calendar-year company has applied it since January 1, 2025 at the latest.

Here is every place a bitcoin holding lands, and the paragraph that puts it there.

Statement	What you show	What the standard says
Balance sheet	A digital assets line at fair value, separate from other intangibles	350-60-35-1 and 45-1. A more detailed split, by holding or by class, is permitted
Balance sheet	Current or noncurrent placement	Not addressed by 350-60. The FASB left it to Topic 210 (BC43)
Balance sheet	Deferred tax liability or asset on the book to tax basis difference	Ordinary income tax accounting, nothing crypto-specific
Income statement	Remeasurement gains and losses, in net income	350-60-45-2, presented separately from other intangible changes
Cash flow statement	Purchases and sales, plus a non-cash adjustment for remeasurement	General ASC 230 rules, with one crypto exception (230-10-45-27A)
Notes, every quarter	Name, cost basis, fair value and units of each significant holding, plus sale restrictions	350-60-50-1 and 50-6
Notes, every year	Cost basis method, income statement line, rollforward, cumulative realized gains and losses	350-60-50-2 to 50-4

Two real balance sheets: Strategy and Tesla

The standard reads abstractly until you see it in a filing. Strategy Inc, which signed its 2024 debt indentures as MicroStrategy Incorporated, holds bitcoin as the core of its balance sheet. Tesla holds it next to a large operating business. Both filed 10-Qs this year.

	Strategy, June 30, 2026	Tesla, September 30, 2026
Balance sheet line	Digital assets, below total current assets	Digital assets, below total current assets
Carrying amount (fair value)	$49.67 billion	$962 million
Units and cost	About 846,000 BTC, cost basis $63.94 billion	Mostly 11,509 BTC at an acquisition cost of $386 million
Share of total assets	About 95% ($49.67 billion of $52.56 billion)	About 0.6% ($962 million of $157.5 billion)
Fair value input	Unadjusted Coinbase prices, its principal market, Level 1	Level I
Where the gain or loss goes	"Unrealized loss (gain) on digital assets" inside operating expenses	Other (expense) income, net, per the MD&A
Cash flow statement	Purchases and sale proceeds in investing, unrealized loss added back in operating	Unrealized loss (gain) added back in operating

Sources for the Strategy column are its Form 10-Q for the quarter ended June 30, 2026 (filed August 3, 2026), the balance sheet, Note 1 and the income tax note. The Tesla column comes from its Form 10-Q for the quarter ended September 30, 2026 (filed October 22, 2026), the balance sheet, Note 2 and the MD&A discussion of other income.

Two things stand out. First, a fair value balance sheet can sit well below cost. Strategy's bitcoin was carried at about $14.27 billion less than it paid, and the company recognized an unrealized loss on digital assets of $22.77 billion for the first six months of 2026. Second, the two companies put the gain or loss in different places. PwC believes remeasurement gains and losses should generally be presented within operating income, while noting that ASC 350-60 does not settle the point and that facts and circumstances matter (PwC Viewpoint 5.3, 15 August 2025). Tesla's MD&A attributes changes in its Other (expense) income, net line partly to adjustments on its bitcoin. Whatever you choose, ASC 350-60 asks you to disclose the line if gains are not shown separately (350-60-50-2(b)).

The share-of-assets row matters beyond accounting. Strategy's 10-Q describes an October 2025 MSCI proposal to exclude from its indexes companies whose primary business involves bitcoin or other digital asset treasury activities and whose digital asset holdings are 50% or more of total assets. On January 6, 2026 MSCI decided not to implement it in its February 2026 review. A ratio that starts on your balance sheet can end up in an index methodology.

Current or noncurrent

The FASB was asked to rule on this and declined, saying Topic 210 already gives enough guidance (ASU 2023-08, BC43). PwC believes in-scope crypto may be presented as noncurrent because it meets the definition of an intangible asset, and that an entity could classify it as current when its investment time horizon at acquisition is less than one year (PwC Viewpoint 5.3). Both filers above present it outside current assets.

Our practical rule is to tie the split to your treasury policy. Bitcoin held as a reserve goes noncurrent. A working balance you spend on payroll or vendors within the year can go current, in its own account, if the policy says so. Our crypto treasury management guide has a policy template that covers that split.

Worked example: two quarters of bitcoin entries

Illustration only. Example Co is a calendar-year US GAAP company that reports quarterly and adopted ASC 350-60 on January 1, 2025. All prices are made up and rounded. We assume a 25% combined tax rate and a tax basis equal to the cost recorded in the books. Your rate and tax basis will differ.

January 10: buy 10 BTC at $90,000 plus a $1,000 exchange fee

Account	Debit	Credit
Digital assets: BTC	901,000
Cash		901,000

ASU 2023-08 deliberately gives no rule on transaction costs (BC35 and BC36). PwC believes a reporting entity should generally capitalize them (PwC Viewpoint 2.4, 10 September 2026), so the fee goes into cost here. The FASB noted in BC35 that under fair value the choice leaves the period's comprehensive income the same either way.

March 31: quarter-end remeasurement, BTC closes at $100,000

Fair value is 10 x $100,000 = $1,000,000 against a carrying amount of $901,000.

Account	Debit	Credit
Digital assets: BTC	99,000
Gain or loss on remeasurement of digital assets		99,000

March 31: deferred tax on the gain

Book value is now $1,000,000 and tax basis is still $901,000. The $99,000 taxable temporary difference times 25% gives a $24,750 liability.

Account	Debit	Credit
Deferred income tax expense	24,750
Deferred tax liability		24,750

This is the mechanism Strategy describes in its own filing. It sets up a deferred tax liability when bitcoin's fair value exceeds its cost basis and adjusts it as the price moves.

May 15: sell 2 BTC at $110,000

The 2 BTC carry $200,000 (2 x $100,000 from the March remeasurement). Proceeds are $220,000.

Account	Debit	Credit
Cash	220,000
Digital assets: BTC		200,000
Gain or loss on digital assets		20,000

The book gain is $20,000 because $19,800 of the increase was already recognized at March 31. For the annual note on realized gains you compare proceeds with cost basis instead. Cost basis of 2 of 10 units bought in one lot is $180,200 (2/10 of $901,000), so the realized gain is $39,800. That figure is $19,800 plus $20,000. With one lot every cost basis method gives the same answer. With several lots, FIFO, specific identification and average cost diverge, and the method goes in the notes (350-60-50-2(a)). Our cost basis guide compares them.

June 30: quarter-end remeasurement, BTC closes at $80,000

The 8 BTC left carry $800,000 and are worth $640,000.

Account	Debit	Credit
Gain or loss on remeasurement of digital assets	160,000
Digital assets: BTC		160,000

June 30: deferred tax flips from liability to asset

Tax basis of the 8 BTC is $720,800 (8/10 of $901,000). Book value is $640,000, so there is now an $80,800 deductible temporary difference and a $20,200 deferred tax asset at 25%. The $24,750 liability from March has to come off as well.

Account	Debit	Credit
Deferred tax liability	24,750
Deferred tax asset	20,200
Deferred income tax benefit		44,950

The current tax on the May sale is booked separately and is left out here. The deferred tax asset is where judgment comes in. Strategy's 10-Q says losses it realizes on bitcoin sales generally would be capital losses, with the related tax benefits generally available only against capital gains. When its bitcoin fell below cost in 2026, Strategy reversed a $2.42 billion deferred tax liability, recorded deferred tax assets of $4.12 billion on unrealized losses and $24.4 million on a realized capital loss, and offset them with a valuation allowance of $4.60 billion against all its domestic net deferred tax assets. Test realizability of your own asset every period, and book an allowance if more likely than not it will not be realized.

What Example Co's statements show at June 30

Balance sheet extract:

Line	June 30
Noncurrent assets: digital assets (8 BTC at $80,000)	640,000
Deferred tax asset, before any valuation allowance	20,200

Income statement, six months:

Line	Q1	Q2	Six months
Gain or loss on remeasurement of digital assets	99,000	(160,000)	(61,000)
Gain or loss on sale of digital assets		20,000	20,000
Deferred income tax (expense) or benefit	(24,750)	44,950	20,200

The pre-tax net loss of $41,000 checks out against cash. Example Co spent $901,000, received $220,000 and holds bitcoin worth $640,000. $901,000 minus $860,000 is $41,000.

Cash flow statement, six months: purchases of digital assets of $901,000 and proceeds from the sale of $220,000 in investing activities, and the $41,000 net loss on digital assets added back in operating activities as a non-cash item. Strategy's 10-Q shows that same split, with "Purchases of digital assets" and "Proceeds from sale of digital assets" in investing. One exception applies to bitcoin you receive from customers in the ordinary course and convert into cash "nearly immediately", which the ASU defines as within hours or a few days, rather than weeks. That cash is an operating cash flow (230-10-45-27A). PwC also believes cash flows from buying and selling crypto held for trading should generally be operating.

The disclosure notes, filled in

These use Example Co's numbers. The interim note is required every quarter, and US GAAP's interim reporting topic was amended to point to it (270-10-50-7(p)).

Every quarter (350-60-50-1). One row per significant holding, with significance judged by fair value. Holdings that are not individually significant are disclosed in aggregate.

Crypto asset	Units held	Cost basis	Fair value
Bitcoin	8	720,800	640,000

Add the fair value, nature, remaining duration and lapse conditions of any bitcoin subject to contractual sale restrictions (350-60-50-6). Example Co has none. Collateral pledged under a loan or a lockup in a custody agreement is where to look.

Every year (350-60-50-2 to 50-4). Shown here for the six months, in the format the annual note takes:

Rollforward of digital assets	Amount
Opening balance, January 1	0
Additions (purchases)	901,000
Dispositions (sale, at carrying amount)	(200,000)
Gains included in net income	0
Losses included in net income	(61,000)
Closing balance, June 30	640,000

The gains line is zero even though Example Co booked a $99,000 gain in March. The standard sorts gains and losses crypto asset by crypto asset, and each holding with a net gain for the period goes in the gains line, each with a net loss in the losses line (350-60-50-3(c) and (d)). Bitcoin's net for the six months is a $61,000 loss, so all of it sits in losses. If you remeasure the 2 BTC to the $110,000 sale price just before the sale, the disposition shows at $220,000 and the loss line at $41,000. Both close at $640,000. Pick one and use it every period.

Around the table you also disclose:

• What drives additions and dispositions, for example purchases, receipts from customers or mining, and sales or payments for services (350-60-50-4(a)).
• Cumulative realized gains and losses on the period's dispositions, here a $39,800 gain (350-60-50-4(b)).
• The cost basis method, for example first-in first-out, specific identification or average cost (350-60-50-2(a)).
• The income statement line that holds the gains and losses, if they are not on a line of their own (350-60-50-2(b)).
• The ASC 820 fair value disclosures, which the FASB confirmed still apply to crypto assets (BC57). Tesla, for example, lists its digital assets in its Level I fair value table.

A company that receives crypto from customers and converts it into cash nearly immediately can leave that activity out of the rollforward and the realized gains disclosure (350-60-50-5).

First-time adoption

A company still moving from the old cost-less-impairment model books the difference between the carrying amount at the end of the prior year and fair value at the start of the adoption year directly to opening retained earnings, not through the income statement (350-60-65-1(b) and (c)). Say 5 BTC bought for $200,000 were written down to $150,000 under the old model and are worth $450,000 on the first day of the adoption year.

Account	Debit	Credit
Digital assets: BTC	300,000
Retained earnings, opening balance		300,000

The entry is shown before tax. Strategy's 10-Q says it applied a cumulative-effect adjustment of $12.75 billion to the opening balance of retained earnings on January 1, 2025, and notes that the standard does not permit restating prior periods. For the full transition walkthrough, see the ASC 350-60 guide.

A note for IFRS filers

None of this applies under IFRS. The IFRS Interpretations Committee concluded that a holding of cryptocurrency is not cash and not a financial asset. IAS 2 Inventories applies when it is held for sale in the ordinary course of business, and IAS 38 Intangible Assets otherwise (IFRIC agenda decision, June 2019). A group reporting under both frameworks needs two carrying amounts for the same bitcoin. The journal entries guide shows the IFRS versions.

The quarter-end bitcoin close checklist

This is the list we would run before signing off a quarter with bitcoin on the balance sheet.

1. Confirm units per wallet and custodian account at the cutoff, against the chain or the custodian statement, not against last quarter's spreadsheet.
2. Take the closing price from your principal market at one documented time. Strategy, for example, uses Coinbase at 4:00 p.m. Eastern Time for the market values in its 10-Q.
3. Post one remeasurement entry per token account and check that each balance equals units times the closing price.
4. Book any sales at carrying amount and record the realized gain against cost basis for the annual note.
5. Recompute the deferred tax position from book value and tax basis, and document the valuation allowance call.
6. Refresh the interim table with units, cost basis and fair value for each significant holding.
7. Review loan agreements, collateral and custody terms for sale restrictions.
8. At year-end, build the rollforward from the four quarters, sorting gains and losses by holding.
9. Lock the period so no later recalculation changes reported numbers.

Items 1, 3 and 6 need unit-level data. Xero and QuickBooks hold the dollar balances, so the units and lots have to come from somewhere else. The setup for the accounts themselves is in our guide to setting up a crypto balance sheet in Xero and QuickBooks, and the unit tie-out is covered in the wallet rollforward guide.

How a subledger produces these numbers

Breezing is a subledger for accountants. It imports wallets and exchanges, verifies balances against the source and posts journal entries to your ledger, per its homepage. Mapped to the checklist above, according to its documentation:

• Units and lots. Cost basis runs as weighted average, FIFO, LIFO or HIFO, per wallet or pooled. For lot methods a downloadable report lists which lots each outbound transaction consumed, with unit prices and transaction hashes (Calculate gain and loss).
• The fair value figures. A Token Report gives opening balances, ins and outs, realized gains and losses and closing balances for any period. With fiat amounts on, it shows cost basis, the token price on the end date, total fair market value and the markup or impairment needed to bring the ledger to fair value (Reporting and exporting). Those are the inputs to the remeasurement entry and the interim table.
• One account per token. Each token maps to its own balance sheet account in Xero or QuickBooks, with minor tokens grouped into one other-crypto account (Mapping your balance sheet). That matches the significant-holding split the notes ask for.
• A closed quarter stays closed. Locking freezes a transaction's cost basis and gain or loss even if you recalculate later, and every lock is recorded in the transaction history (Locking transactions).

Corrections sync again and update the entry already in the ledger. The homepage lists 62 blockchains and 17 exchanges, and pricing starts at $29 a month billed yearly with unlimited wallets and users on every plan. If you are choosing a tool for a bitcoin-only book, our bitcoin accounting software guide covers what to look for.

Quick answers

How do companies account for bitcoin on the balance sheet?

Under ASC 350-60, a US GAAP company measures bitcoin at fair value and shows it on its own balance sheet line, separate from other intangible assets. Remeasurement gains and losses go through net income each period. The notes give units, cost basis and fair value every quarter, plus an annual rollforward.

Is bitcoin a current or noncurrent asset?

Usually noncurrent. ASC 350-60 does not decide it, and the FASB left the question to Topic 210. PwC's view is that in-scope crypto may be presented as noncurrent because it meets the definition of an intangible asset, and as current when the investment horizon at acquisition is under a year.

What line item is bitcoin on the balance sheet?

A separate line, commonly labelled Digital assets, that cannot be combined with goodwill or other intangibles. Strategy and Tesla both show a Digital assets line below total current assets. ASC 350-60 also lets you break the line down further, for example one line per significant crypto holding.

How is bitcoin valued on a company balance sheet?

At fair value under ASC 820 on the reporting date, normally the quoted price in the entity's principal market. Strategy uses unadjusted Coinbase prices as Level 1 inputs, and Tesla reports its digital assets as Level I. Cost basis is still tracked because the notes and tax both need it.

What is the journal entry when a company buys bitcoin?

Debit the digital asset account for the purchase price and credit cash. ASU 2023-08 gives no rule on transaction costs, and PwC believes they should generally be capitalized, so the exchange fee is usually added to the bitcoin's cost. The asset is then remeasured to fair value at the next reporting date.

How do you record unrealized gains and losses on bitcoin?

At each reporting date, compare units on hand times the closing price with the carrying amount. Debit digital assets and credit a remeasurement gain when the price rose, and reverse the direction when it fell. The result goes into net income, shown separately from changes in other intangible assets.

What disclosures does ASC 350-60 require for bitcoin?

Every quarter and year, the name, cost basis, fair value and units of each significant holding, plus any contractual sale restrictions. Each year, the cost basis method, the income statement line if gains are not shown separately, a rollforward of additions, dispositions, gains and losses, and cumulative realized gains and losses.

How does bitcoin create deferred taxes?

Fair value accounting moves the book value while the tax basis stays at cost. When the price is above cost you carry a deferred tax liability, and below cost a deferred tax asset that needs a valuation allowance review. Strategy reversed its liability and set up a full allowance in 2026.

How do bitcoin treasury companies report their holdings?

The same way as any company under ASC 350-60, only at a larger scale. Strategy's June 30, 2026 balance sheet showed $49.67 billion of digital assets against a $63.94 billion cost basis for about 846,000 bitcoin. That one line was about 95% of its total assets.

How does bitcoin show up on the cash flow statement?

Strategy reports purchases of bitcoin and sale proceeds in investing activities and adds the non-cash remeasurement loss back in operating activities, and Tesla makes the same operating add-back. Bitcoin received from customers and converted into cash within hours or a few days is an operating cash flow under ASC 230.

Does Tesla still hold bitcoin on its balance sheet?

Yes. Tesla's 10-Q for the quarter ended September 30, 2026 shows digital assets of $962 million, measured with Level I inputs. A footnote says most of it is 11,509 bitcoin held at an acquisition cost of $386 million, the same unit count it reported at December 31, 2025.

Bottom line

Bitcoin on a US GAAP balance sheet is one line at fair value, usually noncurrent, with every price move running through net income and a deferred tax balance that swings with it. The entries themselves are short. The work is in the inputs: units you can prove, a price you can defend, cost basis by lot, and a rollforward that sorts gains and losses by holding. With those in place each quarter, the notes are mostly copying. Without them, the balance sheet looks precise and rests on a spreadsheet an auditor cannot follow.

Sources

• Accounting Standards Update No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), FASB, December 2023, checked 2026-10-24: supports the six scope criteria (350-60-15-1), fair value measurement with gains and losses in net income (35-1), separate balance sheet presentation and the permitted further split (45-1), separate income statement presentation (45-2), the cash flow cross-reference (45-3) and the operating classification of crypto received as noncash consideration and converted nearly immediately, defined as within hours or a few days rather than weeks (230-10-45-27A), the interim and annual disclosures (50-1 to 50-7) including the asset-by-asset gains and losses lines and the exemption for nearly immediate conversions (50-5), the interim reporting cross-reference (270-10-50-7(p)), the effective date and the retained earnings transition calculated from the prior year-end carrying amount (65-1), the Board's decision not to prescribe transaction cost accounting (BC35 and BC36), the decision to leave current or noncurrent classification to Topic 210 (BC43), and the continued application of Topic 820 fair value disclosures (BC57).
• Strategy Inc. Form 10-Q for the quarter ended June 30, 2026, SEC EDGAR, filed August 3, 2026, checked 2026-10-24: supports digital assets of $49,672,080 thousand and total assets of $52,562,592 thousand at June 30, 2026, the line placed after total current assets, about 846,000 bitcoin with a cost basis of $63,939,306 thousand, fair value from unadjusted Coinbase prices as its principal market (Level 1), gains and losses in "Unrealized loss (gain) on digital assets" within operating expenses, the $22.77 billion unrealized loss for the six months, purchases of digital assets and proceeds from sale of digital assets in investing activities, the deferred tax liability mechanism, the reversal of the $2.42 billion deferred tax liability, deferred tax assets of $4.12 billion and $24.4 million, the $4.60 billion valuation allowance, the capital loss limitation, the $12.75 billion cumulative-effect adjustment to opening retained earnings on January 1, 2025 with no retrospective restatement, the use of the Coinbase price at 4:00 p.m. Eastern Time for market values, the description of MSCI's October 2025 proposal and its January 6, 2026 decision, the capital loss character of realized losses on bitcoin sales, and the exhibit index listing 2024 indentures entered into by MicroStrategy Incorporated.
• Tesla, Inc. Form 10-Q for the quarter ended September 30, 2026, SEC EDGAR, filed October 22, 2026, checked 2026-10-24: supports digital assets of $962 million at September 30, 2026 and $1,008 million at December 31, 2025, total assets of $157,517 million, the line placed after total current assets, Level I classification in the fair value table, the footnote that most digital assets were 11,509 bitcoin at an acquisition cost of $386 million at both dates, the "Digital assets unrealized loss (gain)" operating cash flow adjustment, and the MD&A attribution of changes in Other (expense) income, net partly to adjustments on its bitcoin.
• 5.3 Presentation and disclosure of crypto assets in scope of ASC 350-60, PwC Viewpoint, 15 August 2025, checked 2026-10-24: supports that ASC 350-60 does not address current or noncurrent presentation, PwC's view that in-scope crypto may be presented as noncurrent and could be current with an investment horizon under one year, that remeasurement gains and losses should generally be presented within operating income, and that cash flows from crypto held for trading should generally be operating.
• 2.4 Crypto assets accounted for in accordance with ASC 350-60, PwC Viewpoint, 10 September 2026, checked 2026-10-24: supports PwC's view that a reporting entity should generally capitalize transaction costs.
• Holdings of Cryptocurrencies, IFRS Interpretations Committee, June 2019, checked 2026-10-24: supports that a holding of cryptocurrency is not cash and not a financial asset, and that IAS 2 applies when held for sale in the ordinary course of business and IAS 38 otherwise.
• Breezing homepage, Breezing, undated, checked 2026-10-24: supports importing wallets and exchanges, verifying balances against the source, posting journal entries to the ledger, re-syncing to update entries, and the 62 blockchains and 17 exchanges figures.
• Pricing, Breezing, undated, checked 2026-10-24: supports the $29 per month Basic plan ($350 billed yearly) and unlimited wallets and unlimited users on every plan.
• Calculate Gain and Loss docs, Breezing, undated, checked 2026-10-24: supports weighted average, FIFO, LIFO and HIFO, per wallet or universal, and the lot report listing consumed lots with unit prices and transaction hashes.
• Reporting and Exporting docs, Breezing, undated, checked 2026-10-24: supports the Token Report contents (opening balances, ins and outs, realized gains and losses, closing balances) and, with fiat on, cost basis, end-date token price, total fair market value and the impairment or markup to book.
• Mapping Your Balance Sheet docs, Breezing, undated, checked 2026-10-24: supports mapping each token to its own balance sheet account in Xero or QuickBooks and grouping minor tokens into one other-cryptocurrencies account.
• Locking Transactions docs, Breezing, undated, checked 2026-10-24: supports that locking freezes cost basis and gain or loss figures through later recalculations and that every lock is recorded in the transaction history.