Company: ATLCL
Filing Date: 2025-02-06
Form Type: CORRESP
Source: 0001437749-25-002991
Chunk: 5

Company: Atlanticus Holdings Corp
Filing Date: 2025-02-06
Form: CORRESP
Chunk 5
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 we believe those assumptions should be included in our valuation of the asset as that best approximates the sale price of the asset in a market transaction.

We do not believe that it would be appropriate to provide separate disclosures of a liquidating portfolio of receivables and a separate valuation for the future purchase of receivables. This does not appear to be the intent under ASC 820 and could mislead a user of the financial statements into believing that two separate and unique marketable assets exist.

In future filings, we will include the following revised disclosure in Note 6 “Fair Value of Assets and Liabilities”

Loans at Fair Value.

The fair value of Loans at fair value is based on the present value of future cash flows using a valuation model of expected cash flows and the estimated cost to service and collect those cash flows. We estimate the present value of these future cash flows using internally-developed estimates of assumptions third-party market participants would use in determining fair value, including estimates of credit losses, payment rates, servicing costs, discount rates and yields earned on private label credit and general purpose credit card receivables. We forecast the cash flows underlying our fair value assessment based on the individual offer type (in the case of general purpose credit cards) or by specific offers at our retail partners (for private label credit). While overall product return requirements among the offer types may be similar, the individual product offerings necessary to achieve those returns is often unique to each offer and retailer based on several factors, including acceptance rates of the offers by consumers and underlying consumer performance data which varies by offer type.

Note 6. Fair Values of Assets and Liabilities, page F-16

| 6. | We note your response to prior comment 15. To comply with the disclosure requirement in ASC 825-10-50-30.c, please tell us how you considered the guidance in ASC 825-10-45-5 that indicates that an entity may consider the portion of the total change in fair value that excludes the amount resulting from a change in a base market risk, such as a risk-free rate or a benchmark interest rate, to be the result of a change in instrument-specific credit risk. |

Company Response:

The impact of the costs of capital affects multiple inputs in our model, all of which can have further carry on direct and indirect effects to other inputs and outputs of our fair value model. Increases (or decreases) in the cost of capital, not only could impact the fees and interest that our bank partners charge to our consumers (based on