v3.10.0.1

Financing Receivables and Operating Leases | 9 Months Ended
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Jul. 31, 2018
Leases [Abstract] |
Financing Receivables and Operating Leases | Financing Receivables and Operating Leases Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The components of financing receivables were as follows:
| As of
| July 31, 2018 |  | October 31, 2017
| In millions
Minimum lease payments receivable | $ | 8,530 |  |  | $ | 8,226 |
Unguaranteed residual value | 290 |  |  | 272 |
Unearned income | (705 | ) |  | (654 | )
Financing receivables, gross | 8,115 |  |  | 7,844 |
Allowance for doubtful accounts | (103 | ) |  | (86 | )
Financing receivables, net | 8,012 |  |  | 7,758 |
Less: current portion(1) | (3,435 | ) |  | (3,378 | )
Amounts due after one year, net(1) | $ | 4,577 |  |  | $ | 4,380 |
(1) | The Company includes the current portion in Financing receivables, and amounts due after one year, net in Long-term financing receivables and other assets, in the accompanying Condensed Consolidated Balance Sheets.
Sale of Financing Receivables During the three and nine months ended July 31, 2018 and 2017, the Company entered into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. During the nine months ended July 31, 2018 and 2017, the Company sold $127 million and $130 million, respectively, of financing receivables. The gains recognized on the sales of financing receivables were not material for both periods. Credit Quality Indicators The credit risk profile of gross financing receivables, based upon internal risk ratings, was as follows:
| As of
| July 31, 2018 |  | October 31, 2017
| In millions
Risk Rating: |  |  |  |  |
Low | $ | 4,236 |  |  | $ | 4,156 |
Moderate | 3,697 |  |  | 3,556 |
High | 182 |  |  | 132 |
Total | $ | 8,115 |  |  | $ | 7,844 |
Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. Allowance for Doubtful Accounts The allowance for doubtful accounts for financing receivables as of July 31, 2018 and October 31, 2017 and the respective changes during the nine and twelve months then ended were as follows:
| As of
| July 31, 2018 |  | October 31, 2017
| In millions
Balance at beginning of period | $ | 86 |  |  | $ | 89 |
Provision for doubtful accounts | 27 |  |  | 23 |
Write-offs, net of recoveries | (10 | ) |  | (26 | )
Balance at end of period | $ | 103 |  |  | $ | 86 |
The gross financing receivables and related allowance evaluated for loss were as follows:
| As of
| July 31, 2018 |  | October 31, 2017
| In millions
Gross financing receivables collectively evaluated for loss | $ | 7,708 |  |  | $ | 7,523 |
Gross financing receivables individually evaluated for loss | 407 |  |  | 321 |
Total | $ | 8,115 |  |  | $ | 7,844 |
Allowance for financing receivables collectively evaluated for loss | $ | 75 |  |  | $ | 67 |
Allowance for financing receivables individually evaluated for loss | 28 |  |  | 19 |
Total | $ | 103 |  |  | $ | 86 |
Non-Accrual and Past-Due Financing Receivables The following table summarizes the aging and non-accrual status of gross financing receivables:
| As of
| July 31, 2018 |  | October 31, 2017
| In millions
Billed:(1) |  |  |  |  |
Current 1-30 days | $ | 274 |  |  | $ | 257 |
Past due 31-60 days | 59 |  |  | 52 |
Past due 61-90 days | 15 |  |  | 15 |
Past due > 90 days | 84 |  |  | 58 |
Unbilled sales-type and direct-financing lease receivables | 7,683 |  |  | 7,462 |
Total gross financing receivables | $ | 8,115 |  |  | $ | 7,844 |
Gross financing receivables on non-accrual status(2) | $ | 246 |  |  | $ | 188 |
Gross financing receivables 90 days past due and still accruing interest(2) | $ | 161 |  |  | $ | 133 |
(1) | Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables.
(2) | Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.
Operating Leases Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows:
| As of
| July 31, 2018 |  | October 31, 2017
| In millions
Equipment leased to customers | $ | 7,486 |  |  | $ | 7,356 |
Accumulated depreciation | (3,175 | ) |  | (2,943 | )
Total | $ | 4,311 |  |  | $ | 4,413 |

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- Definition The entire disclosure for lessor entity's leasing arrangements for operating, capital and leveraged leases. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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