Company: SWKH
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0001628280-25-013989
Chunk: 80

Company: SWK Holdings Corp
Filing Date: 2025-03-20
Form: 10-K
Item: Item 1B
Chunk 80
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 from these long-term receivables, an adjustment to the estimated effective interest rate is affected prospectively.The Company evaluates the collectibility of both interest and principal for each loan to determine whether it is impaired. A loan is considered to be impaired when, based on current information and events, the Company determines it is probable that it will be unable to collect amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by comparing the carrying value of the financial asset to the value determined by discounting the expected future cash flows at the loan’s effective interest rate or to the estimated fair value of the underlying collateral, less costs to sell, if the loan is collateralized and the Company expects repayment to be provided solely by the collateral. Impairment assessments require significant judgments and are based on significant assumptions related to the borrower’s credit risk, financial performance, expected sales, and estimated fair value of the collateral.Held for SaleThe Company classifies long-lived assets or disposal groups as held for sale in the period when all of the following conditions have been met:•we have approved and committed to a plan to sell the assets or disposal group;•the asset or disposal group is available for immediate sale in its present condition;•an active program to locate a buyer and other actions required to complete the sale have been initiated;•the sale of the asset or disposal group is probable and expected to be completed within one year;•the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and•it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.The Company measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell and recognize any loss in the period in which the held for sale criteria are met. Gains, if any, are not recognized until the date of sale. We cease depreciation and amortization of a long-lived asset, or assets within a disposal group, upon their designation as held for sale and subsequently assess fair value less any costs to sell at each reporting period until the asset or disposal group is no longer classified as held for sale.

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Provision for Credit LossesThe allowance for credit losses is intended to provide for credit losses inherent in the finance receivables portfolio and is periodically reviewed for adequacy considering credit quality indicators, including expected and historical losses and levels of and trends in