HP 2014 Annual Report Download - page 141
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 8: Financing Receivables and Operating Leases (Continued)
The allowance for doubtful accounts related to financing receivables and changes were as follows:
As of October 31
2014 2013 2012
In millions
Balance at beginning of year ....................................... $131 $149 $130
Provision for doubtful accounts ..................................... 30 38 42
Deductions, net of recoveries ...................................... (50) (56) (23)
Balance at end of year ........................................... $111 $131 $149
The gross financing receivables and related allowance evaluated for loss were as follows:
As of
October 31
2014 2013
In millions
Gross financing receivables collectively evaluated for loss ..................... $6,378 $6,773
Gross financing receivables individually evaluated for loss ..................... 292 380
Total ......................................................... $6,670 $7,153
Allowance for financing receivables collectively evaluated for loss ............... $ 92 $ 95
Allowance for financing receivables individually evaluated for loss ............... 19 36
Total ......................................................... $ 111 $ 131
Non-Accrual and Past-Due Financing Receivables
HP considers a financing receivable to be past due when the minimum payment is not received by
the contractually specified due date. HP generally places financing receivables on non-accrual status,
which is suspension of interest accrual, and considers such receivables to be non-performing at the
earlier of the time at which full payment of principal and interest becomes doubtful or the receivable
becomes 90 days past due. Subsequently, HP may recognize revenue on non-accrual financing
receivables as payments are received, which is on a cash basis, if HP deems the recorded financing
receivable to be fully collectible; however, if there is doubt regarding the ultimate collectability of the
recorded financing receivable, all cash receipts are applied to the carrying amount of the financing
receivable, which is the cost recovery method. In certain circumstances, such as when HP deems a
delinquency to be of an administrative nature, financing receivables may accrue interest after becoming
90 days past due. The non-accrual status of a financing receivable may not impact a customer’s risk
rating. After all of a customer’s delinquent principal and interest balances are settled, HP may return
the related financing receivable to accrual status.
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