Allowance for credit losses

12 Months Ended

Dec. 31, 2023

Movements in the allowance for credit losses during the years ended December 31, 2023 and 2022 were as follows:


	Year Ended December 31, 2023

	Investment in finance leases		Notes receivable		Loans receivable		Total
Allowance for credit losses at beginning of period	$	23,025	$	110,938	$	3,898	$	137,861
Current period (decrease) increase in provision for expected credit losses	(14,101)		21,332		(3,209)		4,022
Write-offs charged against the allowance	—		(107,996)		—		(107,996)
Allowance for credit losses at end of period	$	8,924	$	24,274	$	689	$	33,887


	Year Ended December 31, 2022
	Investment in finance leases		Notes receivable		Loans receivable		Total
Allowance for credit losses at beginning of period	$	71,292	$	40,964	$	5,291	$	117,547
Current period (decrease) increase in provision for expected credit losses	(11,483)		122,568		(1,393)		109,692
Write-offs charged against the allowance	(36,784)		(52,594)		—		(89,378)
Allowance for credit losses at end of period	$	23,025	$	110,938	$	3,898	$	137,861

During the year ended December 31, 2023, we increased our credit provision by $4 million and recognized write-offs charged against the allowance of $108 million, with respect to two of our lessees. During the year ended December 31, 2022, we recognized credit provision and write-offs charged against the allowance of $110 million and $89 million respectively, primarily reflecting provisions and write-offs with respect to two of our lessees and losses due to the Ukraine Conflict.

Substantially all our Financing Receivables portfolio is secured lending and we assess the overall quality of the portfolio based on Financing Receivables by airline customer risk rating as defined below. Our internal risk ratings process is an important source of information in determining our allowance for credit losses and represents a comprehensive approach to evaluating risk in our Financing Receivables portfolio. We stratify our Financing Receivables portfolio into three categories: A, B and C. Category A is considered an excellent or high-credit-quality airline customer; Category B is considered a good-credit-quality airline customer; and those airline customers in Category C are considered marginal. An internal risk rating is developed for our airline customers, which is based upon our proprietary model using data derived from the airline customer financial statements and other relevant data points that may impact our airline customer’s ability to honor its financial commitments. The frequency of rating updates is established by our credit risk policy, which requires periodic monitoring and at least an annual review. The latest credit rating review was performed as of December 31, 2023.

27. Allowance for credit losses (Continued)

The tables below present Financing Receivables carried at amortized cost basis, gross of allowance for credit losses, grouped into the three credit risk categories for the years ended December 31, 2023 and 2022.


	As of December 31, 2023
	Category A		Category B		Category C		Total
	(U.S. Dollars in millions)
Investment in finance leases	$	357	$	213	$	693	$	1,263
Notes receivable	—		13		675		688
Loans receivable	—		44		612		656
Total	$	357	$	270	$	1,980	$	2,607


	As of December 31, 2022
	Category A		Category B		Category C		Total
	(U.S. Dollars in millions)
Investment in finance leases	$	292	$	486	$	601	$	1,379
Notes receivable	—		18		579		597
Loans receivable	16		329		10		355
Total	$	308	$	833	$	1,190	$	2,331