Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 1651

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 9B
Chunk 1651
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 at the required level,
then the excess cash collected is retained in the Trust until the specified level is achieved. Cash in the Spread Accounts is restricted
from our use. Cash held in the various Spread Accounts is invested in high quality, liquid investment securities, as specified in the
Securitization Agreements. In all of our term securitizations we have transferred the receivables (through a subsidiary) to the securitization
Trust. We report the assets and liabilities of the securitization Trust on our Consolidated Balance Sheet. The Noteholders’ and
the related securitization Trusts’ recourse against us for failure of the contract obligors to make payments on a timely basis is
limited, in general, to our Finance Receivables, and Spread Accounts.

Servicing

We consider the contractual
servicing fee received on our managed portfolio held by non-consolidated subsidiaries to be equal to adequate compensation. Additionally,
we consider that these fees would fairly compensate a substitute servicer, should one be required. As a result, no servicing asset or
liability has been recognized. Servicing fees received on the managed portfolio held by non-consolidated subsidiaries are reported as
income when earned. Servicing fees received on the managed portfolio held by consolidated subsidiaries are included in interest income
when earned. Servicing costs are charged to expense as incurred. Servicing fees receivable, which are included in Other Assets in the
accompanying Consolidated Balance Sheets, represent fees earned but not yet remitted to us by the trustee.

     F-12 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Furniture and Equipment

Furniture and equipment are
stated at cost net of accumulated depreciation. We calculate depreciation using the straight-line method over the estimated useful lives
of the assets, which range from three to five years. Assets held under capital leases and leasehold improvements are amortized over the
lesser of the estimated useful lives of the assets or the related lease terms. Amortization expense on assets acquired under capital lease
is included with depreciation expense on owned assets.

Impairment of Long-Lived Assets and Long-Lived Assets to Be
Disposed Of

Long-lived assets and certain
identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to