XML 96 R35.htm IDEA: XBRL DOCUMENT v3.23.2
Financing Receivables (Tables)
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Summary of the components of financing receivables
A summary of the components of the company’s financing receivables is presented as follows:
Client Financing Receivables
Client Loan and Installment Payment ReceivablesInvestment in Sales-Type and Direct Financing
Commercial Financing Receivables
(Dollars in millions)Held forHeld for
At June 30, 2023(Loans)LeasesInvestmentSale*Total
Financing receivables, gross$7,262 $3,853 $251 $865 $12,230 
Unearned income(436)(377)— — (813)
Unguaranteed residual value— 404 — — 404 
Amortized cost$6,826 $3,880 $251 $865 $11,821 
Allowance for credit losses(104)(62)(5)— (171)
Total financing receivables, net$6,722 $3,818 $245 $865 $11,650 
Current portion$3,925 $1,393 $245 $865 $6,429 
Noncurrent portion$2,796 $2,425 $— $— $5,221 
Client Financing Receivables
Client Loan and Installment Payment ReceivablesInvestment in Sales-Type and Direct Financing
Commercial Financing Receivables
(Dollars in millions)Held forHeld for
At December 31, 2022(Loans)LeasesInvestmentSale*Total
Financing receivables, gross$8,875 $4,023 $299 $939 $14,136 
Unearned income(439)(351)— — (790)
Unguaranteed residual value— 422 — — 422 
Amortized cost$8,437 $4,094 $299 $939 $13,769 
Allowance for credit losses(108)(60)(5)— (173)
Total financing receivables, net$8,329 $4,034 $293 $939 $13,596 
Current portion$5,073 $1,485 $293 $939 $7,790 
Noncurrent portion$3,256 $2,549 $— $— $5,806 
*The carrying value of the receivables classified as held for sale approximates fair value.
Schedule of transfer of client and commercial financing assets
The following table presents the total amount of commercial financing receivables transferred.
(Dollars in millions)
For the six months ended June 30:20232022
Commercial financing receivables:
Receivables transferred during the period$4,345 $3,914 
Receivables uncollected at end of period*$928 $815 
*Of the total amount of commercial financing receivables sold and derecognized from the Consolidated Balance Sheet, the amounts presented remained uncollected from business partners as of June 30, 2023 and 2022.
Schedule of financing receivables and allowance for credit losses by class
The following tables present the amortized cost basis for client financing receivables at June 30, 2023 and December 31, 2022, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material.
(Dollars in millions)    
At June 30, 2023:AmericasEMEAAsia PacificTotal
Amortized cost$6,317 $3,019 $1,370 $10,705 
Allowance for credit losses:    
Beginning balance at January 1, 2023$88 $60 $20 $168 
Write-offs$(3)$0 $0 $(4)
Recoveries— 0 0 1 
Additions/(releases)6 (12)0 (6)
Other*7 $0 (1)7 
Ending balance at June 30, 2023$98 $48 $19 $165 
(Dollars in millions)    
At December 31, 2022:AmericasEMEAAsia PacificTotal
Amortized cost$7,281 $3,546 $1,704 $12,531 
Allowance for credit losses:    
Beginning balance at January 1, 2022$111 $61 $23 $195 
Write-offs$(20)$(3)$(2)$(25)
Recoveries1 0 4 5 
Additions/(releases)(5)6 (4)(3)
Other*2 (5)(2)(4)
Ending balance at December 31, 2022$88 $60 $20 $168 
*Primarily represents translation adjustments.
Schedule of past due financing receivables
(Dollars in millions)Total
Amortized
Cost		Amortized
Cost
> 90 Days*		Amortized
Cost
> 90 Days and
Accruing*		Billed
Invoices
> 90 Days and
Accruing		Amortized
Cost
Not
Accruing**
At June 30, 2023:
Americas$6,317 $147 $72 $6 $77 
EMEA3,019 35 4 1 31 
Asia Pacific1,370 17 2 1 16 
Total client financing receivables$10,705 $200 $78 $8 $124 
(Dollars in millions)Total
Amortized
Cost		Amortized
Cost
> 90 Days*		Amortized
Cost
> 90 Days and
Accruing*		Billed
Invoices
> 90 Days and
Accruing		Amortized
Cost
Not
Accruing**
At December 31, 2022:
Americas$7,281 $272 $198 $22 $74 
EMEA3,546 52 8 1 46 
Asia Pacific1,704 20 3 1 17 
Total client financing receivables$12,531 $344 $208 $23 $137 
*At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days.
**Of the amortized cost not accruing, there was a related allowance of $121 million and $122 million at June 30, 2023 and December 31, 2022, respectively. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2023, respectively.
Schedule of amortized cost by credit quality indicator
The following tables present the amortized cost basis for client financing receivables by credit quality indicator at June 30, 2023 and December 31, 2022, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at June 30, 2023 were not material.
(Dollars in millions)AmericasEMEAAsia Pacific
At June 30, 2023:Aaa – Baa3Ba1 – DAaa – Baa3Ba1 – DAaa – Baa3Ba1 – D
Vintage year:      
2023$1,011 $466 $438 $307 $248 $53 
20222,363 507 895 498 476 60 
2021887 231 336 110 146 48 
2020337 161 145 99 140 30 
2019179 46 79 56 75 13 
2018 and prior63 65 18 37 57 24 
Total$4,841 $1,476 $1,911 $1,108 $1,142 $227 
(Dollars in millions)AmericasEMEAAsia Pacific
At December 31, 2022:Aaa – Baa3Ba1 – DAaa – Baa3Ba1 – DAaa – Baa3Ba1 – D
Vintage year:      
2022$3,316 $1,097 $1,447 $704 $799 $96 
20211,197 323 451 159 203 65 
2020559 217 258 158 210 49 
2019251 91 161 99 127 22 
2018128 26 42 16 84 21 
2017 and prior32 45 14 38 12 17 
Total$5,482 $1,800 $2,373 $1,173 $1,434 $269