Company: CRCL
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001193125-25-070481
Chunk: 148

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 148
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 December 2022. Digital assets (gains) losses and impairment Digital assets, including those held as collateral, are accounted for as indefinite-lived intangible assets. Accordingly, these digital assets are not subject to amortization. Instead, we test digital assets for impairment by comparing the digital asset’s fair value to its carrying value. We measure and recognize 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-out basis. Impairment losses are reflected within digital assets (gains) losses and impairment in the consolidated statements of operations. Beginning in the first quarter of 2023, we 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 impairment in the consolidated statements of operations. Other income (expense), net Other income (expense), net, is composed of multiple income (expense) categories, including, but not limited to, the following:

| • |     | Realized and unrealized gains (losses) on liabilities at fair value (e.g., convertible debt, warrants, derivatives, and 
 embedded derivatives);                                                                                                  |

| • |     | Realized and unrealized gains (losses) on investments, which include changes in fair value related to our marketable equity 
 securities and observable price changes on our non-marketable equity securities;                                            |

| • |     | Impairment losses on equity investments; |

| • |     | Interest income on corporate cash balances; |

| • |     | Interest expense, net of accretion of discounts and amortization of premiums; and |

| • |     | Foreign currency exchange gains and losses due to remeasurement of certain foreign currency-denominated monetary assets and 
 liabilities.                                                                                                                |

103

Income tax expense (benefit) Income tax expense (benefit) includes income taxes related to foreign jurisdictions and U.S. federal and state income taxes. As we conduct business activities internationally, any changes in the U.S. and foreign taxation of such activities may increase our overall provision for income taxes in the future. Results of operations We discuss