Credit Losses

9 Months Ended

Feb. 28, 2023

Credit Loss [Abstract]

Credit Losses

(2) Credit Losses

We are exposed to credit losses primarily through our trade receivables. We assess ability to pay for certain customers by conducting a credit review, which considers the customer’s established credit rating and our assessment of creditworthiness. We determine the allowance for credit losses on accounts receivable using a combination of specific reserves for accounts that are deemed to exhibit credit loss indicators and general reserves that are determined using loss rates based on historical write-offs by geography and recent forecasted information, including underlying economic expectations. We update our estimate of credit loss reserves quarterly, considering recent write-offs, collections information, and underlying economic expectations.

Credit losses were $111 million for the three-month period ended February 28, 2023 and $536 million for the nine-month period ended February 28, 2023. Credit losses were $116 million for the three-month period ended February 28, 2022 and $327 million for the nine-month period ended February 28, 2022. Our allowance for credit losses was $452 million at February 28, 2023 and $340 million at May 31, 2022.