Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 141

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 141
---
3. For the years ended December 31, 2022, there was no impairment was recognized for the goodwill.

Long-term investments

Long-term investments are
primarily consisted of equity investments in privately held entities accounted for using the measurement alternative and equity investments
accounted for using the equity method. On January 1, 2022, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial Liabilities. According to the guidance, the Company started to record equity
investments at fair value, with gains and losses recorded through net earnings. And the Company elected to measure certain equity investments
without readily determinable fair value at cost, less impairments, plus or minus observable price changes and assess for impairment quarterly.
Impairment for long term investments approximately $11.2 million approximately for the year ended December 31, 2024.

Equity investments without readily determinable fair values

After the adoption of this
new accounting standard, the Company elected to record equity investments without readily determinable fair values and not accounted for
under the equity method at cost, less impairment, adjusted for subsequent observable price changes on a nonrecurring basis, and report
changes in the carrying value of the equity investment in current earnings. Changes in the carrying value of the equity investment are
required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the
same issuer. Reasonable efforts shall be made to identify price changes that are known or that can reasonably be known.

Equity investments with readily determinable fair values

Equity investments with readily
determinable fair values are measured and recorded at fair value using the market approach based on the quoted prices in active markets
at the reporting date.

Equity investments accounted for using the equity method

The Company accounts for its
equity investment over which it has significant influence but does not own a majority equity interest or otherwise control, using the
equity method. The Company adjusts the carrying amount of the investment and recognizes investment income or loss for its share of the
earnings or loss of the investee after the date of investment. The Company assesses its equity investment for other-than-temporary impairment
by considering factors including, but not limited to, current economic and market conditions, operating performance of the entity, including
current earnings trends and undiscounted cash flows, and other entity-specific information. The fair value determination, particularly
for investments