6. ALLOWANCE FOR DOUBTFUL ACCOUNTS AND CREDIT LOSSES

An allowance for doubtful accounts and credit losses is established to cover probable losses arising from customers’ inability to repay by type of receivables and region.

The allowance for doubtful accounts and credit losses on receivables which will probably not be collected is maintained at a level that is adequate to cover probable losses based on a combination of various factors, such as the customer’s ability to repay and collateral values. The allowance for smaller-balance homogeneous receivables is collectively evaluated using reserve rates, which are calculated depending on the period past due, reflecting the collection status of these receivables, historical credit loss experience, economic trends and other factors. Historical collection trends, as well as prevailing and anticipated economic conditions, are routinely monitored by management, and any required adjustment to the allowance is reflected in current operations. Loan receivables from affiliated companies are individually evaluated based on the relevant information, such as historical credit loss experience, and economic trends and conditions.

When amounts due are determined to be uncollectible or the related collateral is repossessed, receivables and the related allowance are charged off. Repossessed assets are recorded at their estimated fair value less costs to sell and reported in other current assets on the consolidated balance sheets, which amounted to ¥75 million and ¥149 million at March 31, 2013 and 2012, respectively. Recoveries on receivables previously charged off as uncollectable are credited to the allowance for doubtful accounts and credit losses.

The following table presents the changes in allowance for doubtful accounts and credit losses:


(¥ in millions)
For the years ended March 31:	2013			2012			2011
Allowance for doubtful notes and accounts receivable:
Balance at beginning of year	¥	2,404		¥	2,806		¥	2,821
Provision		196			173			300
Charge-offs		(264	)		(225	)		(77	)
Other		168			(350	)		(238	)

Balance at end of year	¥	2,504		¥	2,404		¥	2,806

Allowance for doubtful non-current receivables:
Balance at beginning of year	¥	875		¥	932		¥	770
Provision (Reversal)		(223	)		(43	)		259
Charge-offs		—			(13	)		(93	)
Other		2			(1	)		(4	)

Balance at end of year	¥	654		¥	875		¥	932

Allowance for credit losses on finance receivables:
Balance at beginning of year	¥	4,097		¥	3,101		¥	1,706
Provision		2,531			2,268			2,304
Charge-offs		(628	)		(945	)		(780	)
Other		795			(327	)		(129	)

Balance at end of year	¥	6,795		¥	4,097		¥	3,101

The following table presents the changes in allowance for doubtful accounts and credit losses and the recorded investments in finance receivables and long-term trade accounts receivable:


(¥ in millions)
Allowance for doubtful accounts and credit losses For the year ended March 31, 2013:	Retail finance receivables			Finance lease receivables			Long-term trade accounts receivable			Total
Balance at beginning of year	¥	732		¥	3,365		¥	1,027		¥	5,124
Provision		446			2,085			(433	)		2,098
Charge-offs		(628	)		—			—			(628	)
Recoveries		12			—			—			12
Other		72			711			—			783

Balance at end of year	¥	634		¥	6,161		¥	594		¥	7,389

Individually evaluated for impairment		307			—			415			722
Collectively evaluated for impairment		327			6,161			179			6,667

Recorded Investment at March 31, 2013:
Balance at end of year	¥	262,584		¥	124,040		¥	60,263		¥	446,887

Individually evaluated for impairment		307			—			429			736
Collectively evaluated for impairment		262,277			124,040			59,834			446,151


Allowance for doubtful accounts and credit losses For the year ended March 31, 2012:
Balance at beginning of year	¥	603		¥	2,498		¥	1,016		¥	4,117
Provision		621			1,647			11			2,279
Charge-offs		(473	)		(472	)		—			(945	)
Recoveries		11			—			—			11
Other		(30	)		(308	)		—			(338	)

Balance at end of year	¥	732		¥	3,365		¥	1,027		¥	5,124

Individually evaluated for impairment		404			—			502			906
Collectively evaluated for impairment		328			3,365			525			4,218

Recorded Investment at March 31, 2012:
Balance at end of year	¥	204,593		¥	111,936		¥	58,310		¥	374,839

Individually evaluated for impairment		404			—			518			922
Collectively evaluated for impairment		204,189			111,936			57,792			373,917

Long-term trade accounts receivable in the table includes the current portion, which is included in trade accounts receivable on the consolidated balance sheets.

There is no related allowance for loan receivables from affiliated companies for the years ended March 31, 2013, 2012 and 2011.