Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 1106

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 6
Chunk 1106
---
 matters where, based on information available at the time of this report, there is an indication that it
is both probable that a liability has been incurred and the amount of the loss can be reasonably determined.

     F-15 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have recorded a liability
as of December 31, 2024, which represents our estimate of the immaterial aggregate probable incurred losses for legal contingencies. The
amount of losses that may ultimately be incurred, over and above such losses as are probable, cannot be estimated with certainty.

Accounting Pronouncements Recently Adopted

In November of 2023, the
FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in
this ASU became effective for the Company beginning with this Annual Report on Form 10-K for the year ended December 31, 2024, and we
have adopted using the retrospective transition method. The adoption did not have a material impact on the Company’s consolidated
financial statements. See Note 13 for additional information on the adoption of ASU 2023-07.

(2) Restricted Cash 

Restricted cash consists of
cash and cash equivalent accounts relating to our outstanding securitization trusts and credit facilities. The amount of restricted cash
on our Consolidated Balance Sheets was $125.7 million and $119.3 million as of December 31, 2024 and 2023, respectively.

Our securitization transactions
and one of our warehouse credit facilities require that we establish cash reserves, or spread accounts, as additional credit enhancement.
These cash reserves, which are included in restricted cash, were $62.3 million and $59.0 million as of December 31, 2024 and 2023, respectively.

(3) Finance Receivables

Our portfolio of finance receivables
consists of small-balance homogeneous contracts comprising a single segment and class that is collectively evaluated for impairment on
a portfolio basis according to delinquency status. Our contract purchase guidelines are designed to produce a homogenous portfolio. For
key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from the
average for the portfolio. We report delinquency on a contractual basis. Once a contract becomes greater than 90