A recent filing to the US Securities and Exchange Commission (SEC) indicates that Playboy suffered a significant loss following a drop in the value of payments received for its NFTs. The losses result from the Ether (ETH) the company received after selling its “Rabbitars” NFTs. These non-fungible tokens were launched back in 2021, when the crypto market was soaring.

In total, Playboy took a $4.9 million in impairment losses after the crypto winter wiped most of the market’s value over the past year. As of last December, the value of the ETH from the sale sat at $327,000. According to a company statement, Playboy accounts for its digital assets as “indefinitely-lived intangible assets.” These assets are subject to impairment losses once their fair value drops far below their carrying value at any given period.

According to the filing, “the market price of one [ether] in our principal market ranged from $964 to $3,813 during the year ended Dec. 31, 2022, but the carrying value of each Ethereum we held at the end of the reporting period reflects the lowest price of one Ethereum quoted on the active exchange at any time since its receipt.”

Therefore, “negative swings in the market price of Ethereum could have a material impact on the company’s earnings and carrying value, while only time a rise in prices will impact the company’s earnings positively, is when the Ethereum held in the balance sheet, are sold at a gain.”

Since Playboy launched Rabbitars NFT collection back in October 2021, ETH has lost about 60% of its value. However, lately, there have been signs of the market coming back, and the ETH could recover its lost value in due time. Still, as Playboy puts it, the impairment losses it incurs on its digital assets cannot be recovered even if the fair value rises after the losses have been recorded.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

234 +