Lifestyle and media company, Playboy, recorded almost $5 million in impairment losses arising from the ETH it holds from ‘Rabbitars’ NFT sales conducted in 2021. This is according to a new annual filing with the SEC dated March 16.

In total, Playboy claims to have lost $4.9 million on its Ether balance after opting to hold onto the funds generated from its initial Rabbitars NFT drop. The collection is made up of 11,953 pieces, with each going for 0.1953 ETH in honor of the year the company was established. Given the price of ETH at the time was $4324, it’s safe to assume the company raised in the region of $10 million from the sale.

However, as of last December, the value of the ETH still held in the Playboy wallet sat at $327,000, according to the filling. The significant loss has much to do with the harsh times that befell the crypto market over the past year. ETH suffered a 72% loss between October 2021 and December 2022.

How Playboy Earnings Are Impacted By Impairment Losses

Impairment losses occur when the fair value of said assets falls below their carrying value at any time. According to Playboy, the company accounts for its digital assets as “indefinitely-lived intangible assets,” which are subject to impairment losses.

An excerpt of the filing reads: “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.”

This clearly signifies that negative swings in the price of ETH had an impact on the company’s earnings and carrying value. According to the filing, the only time a rise in the price of these digital assets has a positive impact on earnings is when the ETH held on its balance sheet is sold for a profit.

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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.

The post Playboy Records a $4.9 Million Loss from its Rabbitars NFT Project appeared first on NFT Plazas.