Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 630

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 630
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 assets in the accompanying consolidated balance sheets. Digital assets purchased are recorded at cost and
digital assets awarded to the Company through its mining activities and staking activities are accounted for in accordance with the Company’s
revenue recognition policy disclosed below.

Effective January 1, 2024, the Company early adopted
ASU 2023-08, which requires entities to measure certain cryptocurrencies at fair value, with changes in fair value recorded in net
income in each reporting period. The Company’s digital assets are within the scope of ASU 2023-08 and the transition guidance requires
a cumulative-effect adjustment as of the beginning of the current fiscal year for any difference between the carrying amount of the Company’s
digital assets and fair value.

Prior to the adoption of ASU 2023-08, digital
assets were accounted for as intangible assets with indefinite useful lives and are recorded at cost less impairment in accordance with
ASC 350 - Intangibles-Goodwill and Other. An intangible asset with an indefinite useful life is not amortized but assessed for
impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that
the indefinite-lived asset is impaired. Digital assets held are accounted for as intangible assets with indefinite useful lives and are
subject to impairment losses if the fair value of digital assets decreases below the carrying value at any time during the period. The
fair value is measured using the quoted price of the digital assets at the time its fair value is being measured. In testing for impairment,
the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment
exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary.
If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized,
the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. 

F-11

ASC 820 defines “principal market”
as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and,
as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital assets
held by the Company are traded on a number of active markets globally. The Company does not use any exchanges to buy or sell digital assets.