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

Company: Bit Digital, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Item 1
Chunk 25
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 adjustments to historical
loss patterns. Credit loss expense, inclusive of credit loss expense on all categories of financial assets, is recorded within general
and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Digital
assets holdings

The
Company’s digital assets primarily include bitcoin, ETH and Liquid Staked ETH (“LsETH”), which are included in current
assets in the accompanying consolidated balance sheets. The Company distinguishes between digital assets which fall within the scope
of ASC 350-60 and those which do not. The Company refers to digital assets which fall within the scope of ASC 350-60 (e.g., bitcoin and
ETH) as “crypto assets.” Digital assets which do not fall within the scope of ASC 350-60, Accounting for and Disclosure
of Crypto Assets, are referred to as “digital intangible assets.”

Digital
intangible assets comprised of LsETH that are intangible assets outside the scope of ASC 350-60. A receipt token, in general and by design,
entitles the holder to redeem the crypto intangible asset(s) for which it was exchanged. Therefore, it fails the ‘other goods and
services criterion’ in paragraph 350-60-15-1(b), and thus is outside the scope of Subtopic 350-60. These digital intangible assets
are recorded at cost, less impairment within digital intangible assets on the consolidated balance sheets in accordance with ASC 350-30.
The Company tests digital intangible assets for impairment annually and more frequently if events or changes in circumstances indicate
that it is more likely than not that the asset is impaired. The test for impairment consists of a comparison of the fair value of the
digital intangible assets with their carrying amounts. Refer to Note 6, Digital Asset Holdings for additional information.

10

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