Company: ATLCL
Filing Date: 2025-03-10
Form Type: CORRESP
Source: 0001437749-25-006744
Chunk: 5

Company: Atlanticus Holdings Corp
Filing Date: 2025-03-10
Form: CORRESP
Chunk 5
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 within Management's Discussion and Analysis of Financial Condition and Results of Operations - Changes in fair value of loans, to include the proposed disclosure provided in our response to Comment 1 above.

Critical Accounting Estimates - Measurements for Loans at Fair Value, page 37

| 3. | We note your response to prior comment 5 regarding the inclusion of expected subsequent purchases (and future merchant fees) in your fair value measurement for receivables. In your response, you refer to the guidance in ASC 820-10-35-10E and 35-11A as support for the inclusion of expected subsequent purchases in the fair measurement for your receivables. However, this guidance is not applicable for the measurement of financial assets. As discussed in paragraphs BC46 and BC47 of ASU 2011-04, the FASB Board does not believe the concepts of highest and best use and valuation premise are relevant when measuring the fair value of financial assets, at least in part due to the fact that financial assets do not have alternative uses because a financial asset has specific contractual terms and can have a different use only if the characteristics of the financial asset (that is, the contractual terms) are changed. Furthermore, a change in characteristics causes that particular asset to become a different asset, and the objective of a fair value measurement is to measure the asset that exists at the measurement date. Furthermore, you also state in your response that you do not believe you have a contractual right (i.e., firm commitment) related to subsequent purchases that would be eligible for fair value measurement under ASC 825. For these reasons, we do not believe the inclusion of expected subsequent purchases (and future merchant fees) in your fair value measurement is consistent with the guidance in ASC 820 and ASC 825. Please advise or revise your methodology to comply with the guidance in ASC 820. |

Company Response:

Based on the above Staff comments, we have revised our fair value methodology to remove subsequent purchases (and all merchant fees associated with these subsequent purchases). Below, we discuss the revised methodology for the General Purpose Credit Card Receivables fair value model and the Private Label Credit fair value model, along with the impact of these revisions on cash flows included in the analysis. Our fair value models are dynamic and based on inputs that are derived from historical performance. These inputs are typically expressed as a percentage of outstanding receivables. As such, these rates are applied to the prior period ending balance of consumer receivables for each period in the fair value model to derive period