Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 330

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1B
Chunk 330
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 that includes the enactment date.

Deferred tax assets are recognized
subject to management’s judgment that realization is more likely than not. A valuation allowance is recognized for a deferred tax
asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not
be realized. In making such judgements, significant weight is given to evidence that can be objectively verified.

In determining the possible
future realization of deferred tax assets, we have considered future taxable income from the following sources: (a) reversal of taxable
temporary differences; and (b) forecasted future net earnings from operations. Based upon those considerations, we have concluded that
it is more likely than not that the U.S. and state net operating loss carryforward periods provide enough time to utilize the deferred
tax assets pertaining to the existing net operating loss carryforwards and any net operating loss that would be created by the reversal
of the future net deductions which have not yet been taken on a tax return. Our estimates of taxable income are forward-looking statements,
and there can be no assurance that our estimates of such taxable income will be correct. Factors discussed under "Risk Factors,"
and under the heading “Cautionary Note Regarding Forward-Looking Statements." may affect whether such projections prove to
be correct.

We recognize interest and
penalties related to unrecognized tax benefits within the income tax expense line in the accompanying consolidated statements of operations.
Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheets.

 39 

Uncertainty of Capital Markets and General Economic Conditions

We depend upon the availability
of warehouse credit facilities and access to long-term financing through the issuance of asset-backed securities collateralized by our
automobile contracts. Since 1994, we have completed 103 term securitizations of approximately $20.6 billion in contracts. We generally
conduct our securitizations on a quarterly basis, near the beginning of each calendar quarter, resulting in four securitizations per calendar
year. However, we completed only three securitizations in 2020. In April 2020 we postponed our planned securitization due to the onset
of the pandemic and the effective closure of the capital markets in which our securitizations are executed. Subsequently, we successfully
completed securitizations in June and September 2020, and then on a regular quarterly schedule from January 2021 through January 2025.

Financial