Lifestyle & Media Company, playboyrecorded an impairment loss of approximately $5 million arising from ETH held from the “Rabbits” NFT sale conducted in 2021. This is according to a new annual report to the SEC dated March 16,

Playboy claims to have lost a total of $4.9 million in Ether balance after choosing to keep the funds generated from the initial Rabbitars NFT drop. This collection consists of 11,953 pieces of him, each piece worth 0.1953 ETH to commemorate the year the company was founded. Given that the price of ETH was $4,324 for him at the time, it’s safe to assume that the company raised about $10 million from the sale.

However, as of December last year, the ETH still held in Playboy wallets was worth $327,000. The significant losses have to do with the tough times that have hit the cryptocurrency market over the past year. ETH suffered a 72% loss between October 2021 and December 2022.

How Playboy’s earnings will be impacted by impairment losses

An impairment loss occurs when the fair value of the asset falls below its carrying amount at any time. According to Playboy, the company describes digital assets as: “An intangible asset with an indefinite useful life” Subject to impairment loss.

excerpt of filing read: “One market price [ether] Prices on major markets for the fiscal year ended December 31, 2022 ranged from $964 to $3,813, while the book value of each Ethereum held at the end of the reporting period could have been on active exchanges at any time. Reflects the lowest price quoted for 1 Ethereum. since I received it. ”

This clearly shows that the negative ETH price movement impacted the company’s revenue and book value. According to the filing, rising prices of these digital assets will only have a positive impact on earnings when the ETH held on the balance sheet is sold for profit.

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*All investment/financial opinions expressed by NFT PLAZA are based on the personal research and experience of the site moderators and are intended for educational material only. , the product should be thoroughly investigated.

By Jules

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