Company: CPSS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001683168-25-003436
Chunk: 123

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 123
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 the valuation
methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the financial instrument; and level 3 – inputs to the
valuation methodology are unobservable and significant to the fair value measurement.

Effective January 2018 we
have elected to use the fair value method to value our portfolio of finance receivables acquired in January 2018 and thereafter.

Our valuation policies and
procedures have been developed by our Accounting department in conjunction with our Risk department and with consultation with outside
valuation experts. Our policies and procedures have been approved by our Chief Executive and our Board of Directors and include methodologies
for valuation, internal reporting, calibration and back testing. Our periodic review of valuations includes an analysis of changes in
fair value measurements and documentation of the reasons for such changes. There is little available third-party information such as broker
quotes or pricing services available to assist us in our valuation process.

Our level 3, unobservable
inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the
best information available in the circumstances. They include such inputs as estimates for the magnitude and timing of net charge-offs
and the rate of amortization of the portfolio of finance receivable. Significant changes in any of those
inputs in isolation would have a significant effect on our fair value measurement.

For the quarter ended March
31, 2025, the Company evaluated the appropriate fair value and future earnings rate of existing receivables compared to recently acquired
receivables and our assessment of potential additional future net losses on the portfolio of finance receivables carried at fair value
and did not record a mark down to that portfolio.

     22 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

The table below presents
a reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs:

    Schedule of reconciliation of the finance receivables measured at fair value on a recurring basis 

    Three Months Ended 

    March 31, 

    2025  
    2024 

    (In thousands) 
  
    Balance at beginning of period 
    $3,313,767  
    $2,722,662