Company: BTBT
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110383
Chunk: 28

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 28
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 existing service agreement, resulting from the customer’s request to upgrade to a newer generation of GPUs for future deployment.

11

Property,
plant, and equipment, net

Property,
plant, and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets
or declining-balance method. Direct costs related to developing or obtaining software for internal use are capitalized as property, plant,
and equipment. Capitalized software costs are amortized over the software’s useful life when the software is placed in service.
The estimated useful lives by asset category are:

    Estimated
     Useful  Life
  
    Digital asset miners 
    3 years
  
    Cloud service equipment 
    5 years
  
    Colocation service equipment 
    10 to 15 years
  
    Building 
    30 years
  
    Leasehold improvements 
    15 years
  
    Purchased and internally developed software 
    1-5 years
  
    Vehicle 
    5 years
  
    Other property and equipment 
    20% to 30%

Effective
January 1, 2025, we changed our estimate of the useful lives for our cloud service equipment from three to five years. The change was
made to better reflect the expected usage patterns and economic benefits of the assets.

Impairment
of long-lived assets

Management
reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted
future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized
is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Goodwill

Goodwill
represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is not
subject to amortization, and instead, assessed for impairment annually at the end of each fiscal year, or more frequently when events
or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying
amount in accordance with ASC 350 - Intangibles -Goodwill and Other.

The
impairment assessment involves an option to first assess qualitative factors to determine whether events or circumstances exist that
lead to a determination that it is more likely than not