ADP 2014 Annual Report Download - page 58

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The Company’s receivables, whose carrying value approximates fair value, are as follows:
June 30, 2015
June 30, 2014
Current
Long-term
Current
Long-term
Trade receivables $ 1,564.6
$ —
$ 1,452.7
$ —
Notes receivable 18.8
34.0
94.8
169.9
Less:
Allowance for doubtful accounts - trade receivables (35.1)
—
(38.0)
—
Allowance for doubtful accounts - notes receivable (0.4)
(0.6)
(4.7)
(8.3)
Unearned income - notes receivable (1.0)
(1.2)
(6.0)
(6.2)
$ 1,546.9
$ 32.2
$ 1,498.8
$ 155.4
During fiscal 2015 , the Company sold notes receivable related to Dealer Services financing arrangements for $226.7 million . Although the sale of the notes
receivable transfers the majority of the risk to the purchaser, the Company does retain a minimal level of credit risk on the sold receivables. The cash received in
exchange for the notes receivable sold was recorded within the operating activities on the Statements of Consolidated Cash Flows and the gain on sale realized was
recorded within Other income, net on the Statements of Consolidated Earnings (see Note 3).
The Company determines the allowance for doubtful accounts related to notes receivable based upon a specific reserve for known collection issues, as well as a
non-specific reserve based upon aging, both of which are based upon the history of such losses and current economic conditions. As of fiscal 2015 and 2014 , there
were no notes receivable that were specifically reserved; the entire notes receivable reserve balance was comprised of non-specific reserves.
Long-term receivables at June 30, 2015 mature as follows:
2017
$ 15.3
2018
10.5
2019
5.7
2020
2.3
2021
0.2
Total
$ 34.0
The rollforward of the allowance for doubtful accounts related to notes receivable is as follows:
Current
Long-term
Balance at June 30, 2013 $ 5.3
$ 9.0
Net provision (0.1)
(0.1)
Chargeoffs (0.7)
(0.8)
Recoveries and other 0.2
0.2
Balance at June 30, 2014 $ 4.7
$ 8.3
Net provision 0.4
0.7
Chargeoffs (0.6)
(0.8)
Recoveries and other (A) (4.1)
(7.6)
Balance at June 30, 2015 $ 0.4
$ 0.6
(A) As a result of the sale of the notes receivable related to Dealer Services financing arrangements, the Company released $10.7 million of non-specific reserves
that were accrued on the sold notes receivable, which was recorded in selling, general, and administrative expenses on the Statements of Consolidated Earnings.
The allowance for doubtful accounts as a percentage of notes receivable was approximately 2% as of June 30, 2015 and 5% as of J une 30, 2014 .
On an ongoing basis, the Company evaluates the credit quality of its financing receivables, utilizing aging of receivables, collection experience, and charge-
offs. As events related to a specific client dictate, the credit quality of a client is reevaluated. Approximately 99% and 100% of notes receivable were current at
June 30, 2015 and 2014 , respectively.
54