Allowance for doubtful accounts

Pursuant to the adoption of new accounting guidance relating to disclosures about the allowance for losses and credit quality of finance receivables, we determined that we have two portfolio segments of finance receivables based on the type of financing inherent to each portfolio. The retail portfolio segment represents loans or leases to end-users for the purchase or lease of vehicles. The wholesale portfolio segment represents loans to dealers to finance their inventory. As the initial measurement attributes and the monitoring and assessment of credit risk or the performance of the receivables are consistent within each of our receivable portfolios, the Company determined that each portfolio consisted of one class of receivable.

The activity related to our allowance for doubtful accounts for our retail portfolio, wholesale portfolio, and trade and other receivables is summarized as follows:









	Three Months Ended April 30, 2011
	Retail Portfolio			Wholesale Portfolio		Trade and Other Receivables			Total
(in millions)
Allowance for doubtful accounts, at beginning of period	$	54		$	2	$	38		$	94
Provision for doubtful accounts, net of recoveries	1			—		(3		)	(2		)
Charge-off of accounts^(A)	(15		)	—		(1		)	(16		)
Allowance for doubtful accounts, at end of period	$	40		$	2	$	34		$	76



	Six Months Ended April 30, 2011
	Retail Portfolio			Wholesale Portfolio		Trade and Other Receivables			Total
(in millions)
Allowance for doubtful accounts, at beginning of period	$	58		$	2	$	36		$	96
Provision for doubtful accounts, net of recoveries	(1		)	—		(1		)	(2		)
Charge-off of accounts^(A)	(17		)	—		(1		)	(18		)
Allowance for doubtful accounts, at end of period	$	40		$	2	$	34		$	76



	Three Months Ended April 30, 2010			Six Months Ended April 30, 2010
(in millions)
Allowance for doubtful accounts, at beginning of period	$	110		$	104
Provision for doubtful accounts, net of recoveries	20			34
Charge-off of accounts^(A)	(11		)	(19		)
Allowance for doubtful accounts, at end of period	$	119		$	119

_________________

(A)

We repossess sold and leased vehicles on defaulted finance receivables and leases, and place them into Inventories. Losses recognized at the time of repossession and charged against the allowance for doubtful accounts were $12 million and $15 million for the three months and six months ended April 30, 2011, respectively, and $10 million and $18 million for the three months and six months ended April 30, 2010, respectively.

Impaired finance receivables include accounts with specific loss reserves and certain accounts that are on non-accrual status. Most balances with specific loss reserves are also on a non-accrual status. In certain cases, we continue to collect payments on our impaired finance receivables.

Information regarding impaired finance receivables is as follows:



	As of April 30, 2011
	Retail Portfolio		Wholesale Portfolio		Total
(in millions)
Impaired finance receivables with specific loss reserves	$	33	$	—	$	33
Impaired finance receivables without specific loss reserves	1		—		1
Specific loss reserves on impaired finance receivables	15		—		15
Finance receivables on non-accrual status	18		—		18
Average balance of impaired finance receivables	39		—		39

The Company uses the aging of our receivables as well as other inputs when assessing credit quality. The aging analysis for gross finance receivables is summarized as follows:



	As of April 30, 2011
	Retail Portfolio		Wholesale Portfolio		Total
(in millions)
Current	$	1,790	$	1,237	$	3,027
30-90 days past due	55		1		56
Over 90 days past due	16		1		17
Total finance receivables	$	1,861	$	1,239	$	3,100