Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 302

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 302
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Accounts receivable and allowance for doubtful accounts Accounts receivable are contractual rights to receive cash or digital assets either on demand or at fixed or determinable dates and are recognized as assets on the Company’s balance sheet when earned. Accounts receivable consists of customer funds receivable, and other receivables. Accounts receivable are presented net of an allowance for doubtful accounts, which is an estimate of amounts that may not be collectible. The Company performs ongoing evaluations of its accounts receivable and, if necessary, provides an allowance for doubtful accounts and, beginning January 1, 2023, current expected credit losses in accordance with ASU 2016-13. The Company writes off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues collection of the receivable. F-13

CONFIDENTIAL TREATMENT REQUESTED BY CIRCLE INTERNET GROUP, INC. PURSUANT TO 17 C.F.R. § 200.83 Digital assets Digital assets owned by the Company, including digital assets held as collateral, meet the definition of indefinite lived intangible assets because these digital assets lack physical substance and there is no inherent limit on their useful lives. Accordingly, these digital assets are not subject to amortization. Instead, the Company tests digital assets for impairment by comparing the digital asset’s fair value to its carrying value. The Company measures and recognizes an impairment loss whenever the carrying value exceeds quoted market prices of the respective digital asset during the period and applies costs to transactions on a first-in, first-outbasis. Company owned digital assets and digital assets held as collateral are reflected within Digital assetson theConsolidated Balance Sheets. Impairment losses are reflected within Digital assets (gains) losses and impairmentin the Consolidated Statements of Operations. Beginning in the first quarter of 2023, the Company designated the embedded derivatives associated with the obligation to return digital asset collateral related to stablecoin lending as the hedging instrument in a fair value hedge relationship to hedge the fair value exposure of the corresponding digital assets. Subsequent to the fair value hedge designation, the digital assets designated as the hedged item along with the embedded derivative are recorded at fair value. Changes in fair value of the embedded derivative and the fair value of the hedged item are recorded to Digital assets (gains) losses and impairmentin the Consolidated Statements of Operations. Digital assets (gains) losses and impairmentconsists of the following (in thousands):

|                                                              | 2023 | Year ended December 31,