Investments in Distressed Loans and Foreclosed Real Estate

Investments in distressed loans and REO consisted of the following as of the dates indicated (amounts in thousands):



	April 30, 2015		October 31, 2014
Investment in distressed loans	$	2,258	$	4,001
Investment in REO	63,680		69,799
	$	65,938	$	73,800

In prior periods, we presented our investments in distressed loans and REO in two separate line items on our Condensed Consolidated Balance Sheets. Our Condensed Consolidated Balance Sheet at October 31, 2014 has been reclassified to conform to the fiscal 2015 presentation.

Investments in Distressed Loans

Our investments in distressed loans represent non-performing loans classified as nonaccrual in accordance with ASC 310-10, “Receivable.” Interest income is not recognized on nonaccrual loans. When a loan is classified as nonaccrual, any subsequent cash receipt is accounted for using the cost recovery method.

Investments in REO

The table below provides, for the periods indicated, the activity in REO (amounts in thousands):



	Six months ended April 30,						Three months ended April 30,
	2015			2014			2015			2014
Balance, beginning of period	$	69,799		$	72,972		$	66,934		$	79,267
Additions	1,904			8,036			227			871
Sales	(7,668		)	(4,192		)	(3,382		)	(3,384		)
Impairments	(183		)	(2		)	(14		)	(2		)
Depreciation	(172		)	(162		)	(85		)	(100		)
Balance, end of period	$	63,680		$	76,652		$	63,680		$	76,652

As of April 30, 2015, approximately $10.2 million and $53.5 million of REO was classified as held-for-sale and held-and-used, respectively. As of April 30, 2014, approximately $7.2 million and $69.5 million of REO was classified as held-for-sale and held-and-used, respectively. The table below provides, for the periods indicated, gains we recorded from the acquisitions of REO through foreclosure (amounts in thousands):



	Six months ended April 30,				Three months ended April 30,
	2015		2014		2015		2014
Gains from acquisition of REO through foreclosure	$	230	$	1,523	$	—	$	5