Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 20

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 8
Chunk 20
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. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant
estimates required to be made by management include, but are not limited to, the valuation of digital assets and other current assets,
useful lives of property, plant, and equipment, impairment of long-lived assets, intangible assets and goodwill, valuation of assets
and liabilities acquired in business combinations, provision necessary for contingent liabilities and realization of deferred tax assets.
Actual results could differ from those estimates.

Fair value of financial instruments

ASC 825-10 requires certain disclosures regarding
the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes
the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. The three levels of inputs used to measure fair value are as follows:

    ●
    Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

    ●
    Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

    ●
    Level 3 - inputs to the valuation methodology are unobservable.

Fair value of digital assets is based on Level
1 inputs as these were based on observable quoted prices in the Company’s principal market for identical assets. The fair value
of the Company’s other financial instruments including cash and cash equivalents, restricted cash, loans receivable, deposits, accounts
receivables, other receivables, accounts payable, and other payables, approximate their fair values because of the short-term nature of
these assets and liabilities. Non-financial assets, such as goodwill, intangible assets, operating lease right-of-use assets, and property,
plant and equipment, are adjusted to fair value when there is an indication of impairment and the carrying amount exceeds the asset’s
projected undiscounted cash flows. These assets