Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 1211

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 1211
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% owned subsidiary. All significant intercompany
balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the statements
of cash flows, we consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.
Cash equivalents consist of cash on hand and due from banks and money market accounts. Substantially all of our cash is deposited at three
financial institutions. We maintain cash due from banks in excess of the banks’ insured deposit limits. We do not believe we are exposed
to any significant credit risk on these deposits. As part of certain financial covenants related to debt facilities, we are required to
maintain a minimum unrestricted cash balance. As of December 31, 2024, our unrestricted cash balance was $11.7 million, which exceeded
the minimum amounts required by our financial covenants.

Finance Receivables

Finance receivables, which
we have the intent and ability to hold for the foreseeable future or until maturity or payoff, are presented at cost. All finance receivable
contracts are held for investment. Interest income is accrued on the unpaid principal balance. Origination fees, net of certain direct
origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments. Generally,
payments received on finance receivables are restricted to certain securitized pools, and the related contracts cannot be resold. Finance
receivables are charged off pursuant to the controlling documents of certain securitized pools, generally as described below under Charge
Off Policy. Management may authorize an extension of payment terms if collection appears likely during the next calendar month.

     F-9 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our portfolio of finance receivables
consists of small-balance homogeneous contracts that are collectively evaluated for impairment on a portfolio basis. 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.

Finance Receivables Measured at Fair Value

Effective January 1, 2018,
we adopted the fair value