Sales-Type Leases

9 Months Ended

Feb. 29, 2016

We have certain customer leases providing bargain purchase options, which are accounted for as sales-type leases. Interest income is recognized over the life of the lease using the effective interest method.

The initial acceptance of customer finance arrangements is based on a review of each customer’s credit profile, which may include the review of third party credit reports, customer financial statements and/or bank verifications. We monitor the credit quality of our sales-type lease portfolio based on payment activity and the related finance lease receivable aging. This credit quality is assessed on a monthly basis. Our historical losses on finance lease receivables are insignificant, and therefore we do not have a specific allowance for credit losses.

The minimum lease payments receivable and the net investment included in other assets for such leases were as follows:



	February 29, 2016			May 31, 2015
Gross minimum lease payments receivable	$	3,824		$	6,109
Less – unearned interest	(124		)	(233		)
Net investment in sales-type lease receivables	$	3,700		$	5,876

The following table provides estimated future minimum lease payments by year related to sales-type leases:



Year ending May 31,	Future Payments
2016 (remaining)	$	1,084
2017	2,360
2018	363
2019	17
2020	—
	$	3,824