HP 2015 Annual Report Download - page 144

Table of Contents



The credit risk profile of gross financing receivables, based on internally assigned ratings, was as follows:

The allowance for doubtful accounts for financing receivables is comprised of a general reserve and a specific reserve. HP maintains general reserve
percentages on a regional basis and bases such percentages on several factors, including consideration of historical credit losses and portfolio delinquencies,
trends in the overall weighted-average risk rating of the portfolio, current economic conditions and information derived from competitive benchmarking. HP
excludes accounts evaluated as part of the specific reserve from the general reserve analysis. HP establishes a specific reserve for financing receivables with
identified exposures, such as customer defaults, bankruptcy or other events, that make it unlikely HP will recover its investment. For individually evaluated
receivables, HP determines the expected cash flow for the receivable, which includes consideration of estimated proceeds from disposition of the collateral,
and calculates an estimate of the potential loss and the probability of loss. For those accounts where a loss is considered probable, HP records a specific
reserve. HP generally writes off a receivable or records a specific reserve when a receivable becomes 180 days past due, or sooner if HP determines that the
receivable is not collectible.
The allowance for doubtful accounts related to financing receivables and changes were as follows:
142
 
    
   
Risk Rating:
Low $ 3,458 $ 3,536
Moderate 3,158 3,022
High 73 112
Total $ 6,689 $ 6,670
 
     
   
Balance at beginning of year $ 111 $ 131 $ 149
Provision for doubtful accounts 25 30 38
Deductions, net of recoveries (41) (50) (56)
Balance at end of year $ 95 $ 111 $ 131
Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.