Financing Receivables (Tables)

9 Months Ended

Sep. 30, 2020


	Client Financing Receivables
	Client Loan and		Investment in
	Installment Payment		Sales-Type and		Commercial
(Dollars in millions)	Receivables		Direct Financing		Financing
At September 30, 2020:	(Loans)		Leases		Receivables		Total
Financing receivables, gross	$	11,599	$	4,124	$	2,127	$	17,849
Unearned income		(479)		(339)		(3)		(822)
Residual value*		—		507		—		507
Amortized cost	$	11,119	$	4,292	$	2,124	$	17,534
Allowance for credit losses		(162)		(92)		(9)		(264)
Total financing receivables, net	$	10,957	$	4,200	$	2,114	$	17,271
Current portion	$	6,921	$	1,813	$	2,114	$	10,848
Noncurrent portion	$	4,036	$	2,387	$	—	$	6,423

* Includes guaranteed and unguaranteed residual value.


	Client Financing Receivables
	Client Loan and		Investment in
	Installment Payment		Sales-Type and		Commercial
(Dollars in millions)	Receivables		Direct Financing		Financing
At December 31, 2019:	(Loans)		Leases		Receivables		Total
Financing receivables, gross	$	13,592	$	6,077	$	3,836	$	23,504
Unearned income		(570)		(509)		(4)		(1,083)
Recorded investment	$	13,022	$	5,567	$	3,831	$	22,421
Allowance for credit losses		(138)		(72)		(11)		(221)
Unguaranteed residual value		—		652		—		652
Guaranteed residual value		—		53		—		53
Total financing receivables, net	$	12,884	$	6,199	$	3,820	$	22,904
Current portion	$	8,037	$	2,334	$	3,820	$	14,192
Noncurrent portion	$	4,847	$	3,865	$	—	$	8,712


(Dollars in millions)
At September 30, 2020:	Americas		EMEA		Asia Pacific		Total
Amortized cost	$	7,631	$	4,813	$	2,968	$	15,411

Allowance for credit losses
Beginning balance at December 31, 2019	$	120	$	54	$	36	$	210
Adjustment for adoption of new standard		21		15		5		41
Beginning balance at January 1, 2020	$	142	$	69	$	41	$	252
Write-offs	$	(27)	$	(1)	$	(3)	$	(31)
Recoveries		0		0		2		2
Additions/(releases)		33		8		(1)		40
Other*		(11)		2		0		(9)
Ending balance at September 30, 2020	$	137	$	78	$	39	$	254

* Primarily represents translation adjustments.


(Dollars in millions)
At December 31, 2019:	Americas		EMEA		Asia Pacific		Total
Recorded investment
Lease receivables	$	3,419	$	1,186	$	963	$	5,567
Loan receivables		6,726		3,901		2,395		13,022
Ending balance	$	10,144	$	5,087	$	3,359	$	18,590
Recorded investment collectively evaluated for impairment	$	10,032	$	5,040	$	3,326	$	18,399
Recorded investment individually evaluated for impairment	$	112	$	47	$	32	$	191

Allowance for credit losses
Beginning balance at January 1, 2019
Lease receivables	$	53	$	22	$	24	$	99
Loan receivables		105		43		32		179
Total	$	158	$	65	$	56	$	279
Write-offs	$	(42)	$	(3)	$	(18)	$	(63)
Recoveries		1		0		1		2
Additions/(releases)		5		(7)		(3)		(5)
Other*		(1)		0		(1)		(2)
Ending balance at December 31, 2019	$	120	$	54	$	36	$	210
Lease receivables	$	33	$	23	$	16	$	72
Loan receivables	$	88	$	31	$	20	$	138

Related allowance, collectively evaluated for impairment	$	25	$	11	$	4	$	39
Related allowance, individually evaluated for impairment	$	96	$	43	$	32	$	171

* Primarily represents translation adjustments.


					Amortized		Billed
	Total		Amortized		Cost		Invoices		Amortized
(Dollars in millions)	Amortized		Cost		> 90 Days and		> 90 Days and		Cost Not
At September 30, 2020:	Cost		> 90 Days (1)		Accruing (1)		Accruing		Accruing (2)
Americas	$	7,631	$	257	$	166	$	31	$	102
EMEA		4,813		99		13		5		93
Asia Pacific		2,968		60		27		6		34
Total client financing receivables	$	15,411	$	416	$	206	$	41	$	229

(1)	At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days.

(2)	Of the amortized cost not accruing, there is a related allowance of $170 million. Financing income recognized on these receivables was immaterial for the three and nine months ended September 30, 2020, respectively.

(1)	At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days.

(2)	Of the recorded investment not accruing, $191 million is individually evaluated for impairment with a related allowance of $171 million. Financing income recognized on these receivables was immaterial for the three and nine months ended September 30, 2019, respectively.