Net book value of digital assets of Playboy as of December dropped to $ 327 thousand. A year earlier the figure was equal to $ 6.8 million
PLBY Group, parent company of Playboy magazine, said it suffered a $4.9 million asset impairment loss in Ethereum (ETH) in 2022, according to its annual report. The company was accepting the leading altcoin as payment for its 2021 Rabbitars collection NFTs.
In 2021, the company received $7.8 million from the sale of NFTs. At the end of that year, however, it recorded a $1 million loss on their impairment. At the end of 2022, the value of the digital assets on the Playboy balance sheet was $327,000.
Digital assets as of December 31, 2022 and 2021 consisted of Ethereum cryptocurrency from the sale of NFT. As of December 31, 2022 and 2021, the carrying value of our digital assets was $0.3 million and $6.8 million, respectively. The digital asset impairment charges for the years ended December 31, 2022 and 2021 were $4.9 million and $1 million, respectively.
Playboy explained that it accounts for its digital assets as “indefinite-lived intangible assets.” These are subject to impairment if their fair value falls below their carrying value at any time. Impairment losses that the company incurs on digital assets cannot be recovered. Even if the fair value of the assets increases after impairment losses are accepted.
The market price of a single Ethereum ranged from $964 to $3,813 during 2022. But book value of each Ethereum that Playboy owned at the end of a reporting period. It reflects the lowest price per Ethereum on the exchange at any time since it was received.
Our experts note that negative fluctuations in the market price of Ethereum could have a significant impact on Playboy’s profits and book value. While an increase in prices will only have a positive impact on company profits. If the tokens on the balance sheet are sold at a profit.
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