EQUIPMENT ON OPERATING LEASES

The carrying amount of Equipment on operating leases, net in the Consolidated Statements of Financial Position as of December 31, was as follows:



(Millions of dollars)
	2019			2018
Equipment on operating leases, at cost	$	5,171		$	5,201
Less: Accumulated depreciation	(1,588		)	(1,639		)
Equipment on operating leases, net	$	3,583		$	3,562

Our lease agreements may include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value.

The residual value of leased equipment is determined based on its estimated end-of-term market value. We estimate the residual value of leased equipment at the inception of the lease based on a number of factors, including historical wholesale market sales prices, past remarketing experience and any known significant market/product trends. The following critical factors are also considered in our residual value estimates: lease term, market size and demand, total expected hours of usage, machine configuration, application, location, model changes, quantities, third-party residual guarantees and contractual customer purchase options. The residuals for leases classified as operating leases are included in Equipment on operating leases, net in the Consolidated Statements of Financial Position.

During the term of our leases, we monitor residual values. For operating leases, adjustments to depreciation expense reflecting changes in residual value estimates are recorded prospectively on a straight-line basis.

The carrying amount of residual assets covered by residual value guarantees and subject to operating leases was $11 million and $25 million as of December 31, 2019 and 2018, respectively.

At December 31, 2019, payments due for operating leases were as follows:



(Millions of dollars)
2020		2021		2022		2023		2024		Thereafter		Total
$	812	$	511	$	268	$	129	$	59	$	35	$	1,814

At December 31, 2018, scheduled minimum rental payments for operating leases were as follows:



(Millions of dollars)
2019		2020		2021		2022		2023		Thereafter		Total
$	808	$	503	$	257	$	115	$	41	$	15	$	1,739

We sell operating lease receivables to third parties to mitigate the concentration of credit risk with certain customers. Accordingly, this presentation should not be regarded as a forecast of future cash collections.

Revenues from operating leases were $1.04 billion for the year ended December 31, 2019. We typically pay property taxes on tax leases directly to the taxing authorities and invoice the lessee for reimbursement. These property tax reimbursements are accounted for as variable lease payments and are included in Operating lease revenues in the Consolidated Statements of Profit. We individually assess our operating lease receivables for impairment. If collectability of a recorded operating lease receivable is not considered probable, we recognize a current-period adjustment against operating lease revenue.