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

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 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.

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CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

(2) 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 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 acquired after 2017. Finance receivables measured at fair value are
recorded separately on the Company’s Balance Sheet and are excluded from all tables in this footnote.

We consider an automobile contract delinquent
when an obligor fails to make at least 90% of a contractually due payment by the following due date, which date may have been extended
within limits specified in the servicing agreements. The period of delinquency is based on the number of days payments are contractually
past due, as extended where applicable. Automobile contracts less than 31 days delinquent are not reported as delinquent. In certain
circum