Fair Value Measurements |
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| Fair Value Measurements | 4.Fair Value Measurements The Company measures the fair values of its assets and liabilities, where applicable, based on the price that would be received upon sale of an asset or the price paid to transfer a liability, in an orderly transaction between market participants at the measurement date, i.e., the “exit price.” Under applicable accounting standards, fair value measurements are categorized into one of three levels based on the inputs to the valuation technique with the highest priority given to unadjusted quoted prices in active markets and the lowest priority given to unobservable inputs. The Company categorizes its fair value measurements of financial instruments based on this three-level hierarchy. The following is a brief description of each level:
The Company does not have any financial instruments that are subject to fair value measurements on a recurring basis. Financial Instruments Not Required to Be Carried at Fair Value The table below summarizes fair value estimates for the Company’s financial instruments that are not required to be carried at fair value. The carrying amounts in the following table are recorded in the combined and condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025 (in thousands):
Investment in receivables, net The fair value of investments in receivables, net is measured using Level 3 inputs by discounting the estimated future cash flows generated by the Company’s proprietary forecasting models. The key inputs include the estimated future gross cash flow, average cost to collect, and a discount rate. The determination of such inputs requires significant judgment. The Company evaluates the use of key inputs on an ongoing basis and refines the data as it continues to obtain market data. See Note 5 to the combined and condensed consolidated financial statements for additional information. Credit card receivables, net The fair value approximates the carrying value, due to their short-term nature. Revolving Credit Facility The fair value of the Revolving Credit Facility, as supplemented or modified from time to time, (the “Revolving Credit Facility”) is measured using Level 3 inputs. The fair value approximates the principal value due to the short-term adjustable-rate nature of the notes payable. Senior unsecured bonds due 2026, 2029 and 2030 The fair value estimates for the Senior Unsecured Bonds are based on quoted prices for identical assets or liabilities in markets that are not active. Accordingly, the Company uses Level 2 inputs for its fair value estimates. |
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