Canon 2011 Annual Report Download - page 70

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68 F I N A N C I A L S E C T I O N >N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Total minimum lease payments receivable
Unguaranteed residual values
Executory costs
Unearned income
Less allowance for doubtful receivables
Less current portion
2011 2010
Millions of yen
Thousands of
U.S. dollars
2011
¥
204,326
8,195
(2,275)
(24,955)
185,291
(7,039)
178,252
(66,337)
¥
111,915
¥215,925
11,120
(2,063)
(27,891)
197,091
(7,983)
189,108
(71,500)
¥117,608
$2,619,564
105,064
(29,166)
(319,936)
2,375,526
(90,244)
2,285,282
(850,474)
$1,434,808
December 31
Balance at beginning of year
Charge-offs
Provision
Other
Balance at end of year
¥9,023
(3,103)
1,995
68
¥7,983
¥
7,983
(1,937)
2,052
(1,059)
¥
7,039
$102,346
(24,833)
26,308
(13,577)
$ 90,244
Years ended December 31
2012
2013
2014
2015
2016
Thereafter
Financing leases Operating leases Financing leases
Millions of yen Thousands of U.S. dollars
Operating leases
¥80,411
58,396
37,177
19,317
8,486
539
¥204,326
¥7,610
2,367
2,045
1,632
1,559
248
¥15,461
$1,030,910
748,667
476,628
247,654
108,795
6,910
$2,619,564
$ 97,564
30,346
26,218
20,923
19,987
3,180
$198,218
Year ending December 31:
7. FINANCE RECEIVABLES AND OPERATING LEASES
Finance receivables represent financing leases which consist
of sales-type leases and direct-financing leases resulting
from the marketing of Canon’s and complementary third-
party products primarily in foreign countries. These
receivables typically have terms ranging from 1 year to 8
years. The components of the finance receivables, which are
included in prepaid expenses and other current assets, and
other assets in the accompanying consolidated balance
sheets, are as follows:
The activity in the allowance for credit losses is as follows:
2011 2010
Millions of yen
Thousands of
U.S. dollars
2011
Canon has policies in place to ensure that its products
are sold to customers with an appropriate credit history,
and continuously monitors its customers’ credit quality
based on information including length of period in arrears,
macroeconomic conditions, initiation of legal proceedings
against customers and bankruptcy filings. The allowance for
credit losses of finance receivables are evaluated collectively
based on historical experience of credit losses. An additional
reserve for individual accounts is recorded when Canon
becomes aware of a customer’s inability to meet its finan-
cial obligations, such as in the case of bankruptcy filings.
Finance receivables which are past due or individually eval-
uated for impairment at December 31, 2011 and 2010 are
not significant.
The cost of equipment leased to customers under operat-
ing leases included in property, plant and equipment, net at
December 31, 2011 and 2010 was ¥75,391 million ($966,551
thousand) and ¥63,239 million, respectively. Accumulated
depreciation on equipment under operating leases at
December 31, 2011 and 2010 was ¥54,791 million ($702,449
thousand) and ¥43,829 million, respectively.
The following is a schedule by year of the future minimum
lease payments to be received under financing leases and
non-cancelable operating leases at December 31, 2011.