Company: GAME
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023589
Chunk: 304

Company: GameSquare Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 304
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 the accounting treatment of cryptocurrency holdings could have significant accounting impacts, including increasing the volatility
of our results. 

In
December 2023, the FASB issued ASU 2023-08, which upon our adoption will require us to measure in-scope cryptocurrency assets at fair
value in our statement of financial position, and to recognize gains and losses from changes in the fair value of our cryptocurrency
in net income each reporting period. ASU 2023-08 will also require us to provide certain interim and annual disclosures with respect
to our cryptocurrency holdings. The standard is effective for our interim and annual periods beginning January 1, 2025, with a cumulative-effect
adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period in which we adopt the guidance.
We adopted ASU 2023-08 for the fiscal year beginning January 1, 2025 and the adoption did not have any impact to our consolidated financial
statements as we did not have any cryptocurrency holdings at adoption. Due in particular to the volatility in the price of cryptocurrencies,
we expect the adoption of ASU 2023-08 to have a material impact on our financial results in future periods, increase the volatility of
our financial results, and affect the carrying value of our cryptocurrency on our balance sheet, and it could also have adverse tax consequences,
which in turn could have a material adverse effect on our financial results and the market price of our Common Stock. Additionally, as
a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of retained earnings as of the beginning of the
annual period in which we adopt the guidance and not permitting retrospective restatement of our historical financial statements, our
future results will not be comparable to results from periods prior to our adoption of the guidance.

50

The
broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and
use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets
are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.

Changes
in our ownership of cryptocurrency could have accounting, regulatory and other impacts, as well. For example, our indirect ownership
of Ethereum through ownership interests in a fund that owns such cryptocurrencies and deemed ownership via ownership of cryptocurrency
derivative assets may impact the accounting treatment for our cryptocurrencies, our ability to use