Company: CPSS
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001683168-25-005901
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Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 8
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(1) Summary of Significant Accounting Policies

Description of Business

We were formed in California on March 8, 1991.
We specialize in purchasing and servicing retail automobile installment sale contracts (“automobile contracts” or “finance
receivables”) originated by licensed motor vehicle dealers located throughout the United States (“dealers”) in the sale
of new and used automobiles, light trucks and passenger vans. Through our purchases, we provide indirect financing to dealer customers
for borrowers with limited credit histories or past credit problems (“sub-prime customers”). We serve as an alternative source
of financing for dealers, allowing sales to customers who otherwise might not be able to obtain financing. In addition to purchasing installment
purchase contracts directly from dealers, we have also (i) lent money directly to consumers for loans secured by vehicles, (ii) purchased
immaterial amounts of vehicle purchase money loans from non-affiliated lenders, and (iii) acquired installment purchase contracts in four
merger and acquisition transactions. In this report, we refer to all of such contracts and loans as "automobile contracts."

Basis of Presentation

Our Unaudited Condensed Consolidated Financial
Statements have been prepared in conformity with accounting principles generally accepted in the United States of America, with the instructions
to Form 10-Q and with Article 10 of Regulation S-X of the Securities and Exchange Commission, and include all adjustments that are, in
management’s opinion, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are,
in the opinion of management, of a normal recurring nature. Results for the six-month period ended June 30, 2025 are not necessarily indicative
of the operating results to be expected for the full year.

Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America
have been condensed or omitted from these Unaudited Condensed Consolidated Financial Statements. These Unaudited Condensed Consolidated
Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements
included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates

The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the
reported amounts of income and expenses during the reported