Company: CPSS
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001683168-25-005901
Chunk: 7

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 8
Chunk 7
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 respect to other indebtedness of ours, but only if such other event of default were to be accompanied by acceleration
of such other indebtedness.

Provision for Contingent
Liabilities

We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both
continuing and discontinued. Our legal counsel has advised us on such 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.

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CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09,
“Income Taxes (Topic 740),” which is intended to provide greater transparency in various income tax components that affect the
rate reconciliation based on the applicable taxing jurisdictions, as well as the qualitative and quantitative aspects of those components.
This new standard will be effective for annual reporting periods beginning on or after December 15, 2024, with early adoption permitted.
The Company is currently evaluating the impact of ASU 2023-09; however, at the current time, the Company does not believe this ASU will
have a material impact on its consolidated financial statements.

(2) Finance Receivables,
net

Our portfolio of finance receivables,
net 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 days delinquent,
we do not recognize additional interest income until the obligor under the contract makes sufficient payments to be less than 90 days
delinquent. Any payments received on a contract that is greater than 90 days delinquent are first applied to accrued interest and then
to principal reduction.

In
January 2018 the Company adopted the fair value method of accounting for finance receivables, net acquired after 2017. Finance receivables,
net measured at fair value