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ACCOUNTS AND NOTES RECEIVABLE, NET | 3 Months Ended
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Mar. 28, 2020
Receivables [Abstract] |
ACCOUNTS AND NOTES RECEIVABLE, NET | ACCOUNTS AND NOTES RECEIVABLE, NET
(Millions of Dollars) | March 28, 2020 |  | December 28, 2019
Trade accounts receivable | $ | 1,521.1 |  |  | $ | 1,284.0 |
Trade notes receivable | 144.1 |  |  | 156.7 |
Other accounts receivable | 138.0 |  |  | 126.3 |
Gross accounts and notes receivable | $ | 1,803.2 |  |  | $ | 1,567.0 |
Allowance for credit losses | (121.7 | ) |  | (112.4 | )
Accounts and notes receivable, net | $ | 1,681.5 |  |  | $ | 1,454.6 |
Long-term receivables, net | $ | 138.9 |  |  | $ | 146.1 |
Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. Adequate reserves have been established to cover expected credit losses. Long-term receivables, net, of $138.9 million and $146.1 million at March 28, 2020 and December 28, 2019, respectively, are reported within Other assets in the Condensed Consolidated Balance Sheets. The Company's financing receivables are predominantly related to certain security equipment sales-type leases with commercial businesses. As of March 28, 2020, the current portion of financing receivables within Trade notes receivable approximated $75.9 million. Generally, the Company retains legal title to any equipment under lease and holds the right to repossess such equipment in an event of default. All financing receivables are interest-bearing and the Company has not classified any financing receivables as held-for-sale. Interest income earned from financing receivables that are not delinquent is recorded on the effective interest method. The changes in the allowance for credit losses for the three months ended March 28, 2020 are as follows:
(Millions of Dollars) |  | Balance December 28, 2019 |  | Cumulative Effect Adjustment (a) |  | Charged To Costs and Expenses |  | Charged To Other Accounts (b) |  | Deductions (c) |  | Balance March 28, 2020
Accounts receivable |  | $ | 99.3 |  |  | $ | 2.9 |  |  | $ | 10.7 |  |  | $ | (2.8 | ) |  | $ | (2.0 | ) |  | $ | 108.1 |
Notes receivable |  | $ | 13.1 |  |  | $ | 0.9 |  |  | $ | — |  |  | $ | (0.2 | ) |  | $ | (0.2 | ) |  | $ | 13.6 |
Total |  | $ | 112.4 |  |  | $ | 3.8 |  |  | $ | 10.7 |  |  | $ | (3.0 | ) |  | $ | (2.2 | ) |  | $ | 121.7 |
(a) | Represents the cumulative-effect adjustment to opening retained earnings due to the adoption of ASU 2016-13. Refer to Note B, New Accounting Standards, for further discussion.
(b) Amounts represent the impacts of foreign currency translation, acquisitions and net transfers to/from other accounts. (c) Amounts represent charge-offs less recoveries of accounts previously charged-off. The following is a summary of the expected timing of receipt of payments from customers on an undiscounted basis as of March 28, 2020 relating to the Company’s lease receivables:
(Millions of Dollars) |  | Total |  | Within 1 Year |  | 2 Years |  | 3 Years |  | 4 Years |  | 5 Years |  | Thereafter
Financing receivables |  | $ | 202.2 |  |  | $ | 75.9 |  |  | $ | 57.4 |  |  | $ | 37.0 |  |  | $ | 19.9 |  |  | $ | 8.3 |  |  | $ | 3.7 |
Operating leases |  | $ | 53.2 |  |  | $ | 50.8 |  |  | $ | 1.3 |  |  | $ | 0.8 |  |  | $ | 0.3 |  |  | $ | — |  |  | $ | — |
The following is a summary of lease revenue and sales-type lease profit for the three months ended March 28, 2020 and March 30, 2019:
(Millions of Dollars) |  | 2020 |  | 2019
Sales-type lease revenue |  | $ | 23.0 |  |  | $ | 21.9 |
Lease interest revenue |  | 3.1 |  |  | 3.2 |
Operating lease revenue |  | 36.3 |  |  | 36.7 |
Total lease revenue |  | $ | 62.4 |  |  | $ | 61.8 |
Sales-type lease profit |  | $ | 9.1 |  |  | $ | 8.7 |
In October 2018, the Company entered into an accounts receivable sale program. According to the terms, the Company sells certain of its trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS"). The BRS, in turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash. The Purchaser’s maximum cash investment in the receivables at any time is $110.0 million. The purpose of the program is to provide liquidity to the Company. These transfers qualify as sales under ASC 860, Transfers and Servicing, and receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At March 28, 2020, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold. At March 28, 2020 and December 28, 2019, approximately $55.0 million and $100.0 million of net receivables were derecognized, respectively. For the three months ended March 28, 2020 and March 30, 2019, proceeds from transfers of receivables to the Purchaser totaled $49.1 million and $93.5 million, respectively, and payments to the Purchaser during these periods totaled $94.1 million and $167.7 million, respectively. The program resulted in a pre-tax loss of $0.7 million and $1.4 million for the three months ended March 28, 2020 and March 30, 2019, respectively, which included service fees of $0.2 million and $0.3 million, respectively. All cash flows under the program are reported as a component of changes in working capital within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable. As of March 28, 2020 and December 28, 2019, the Company's deferred revenue totaled $210.9 million and $209.8 million, respectively, of which $115.3 million and $108.9 million, respectively, was classified as current within Accrued expenses in the Condensed Consolidated Balance Sheets. Revenue recognized for the three months ended March 28, 2020 and March 30, 2019 that was previously deferred as of December 28, 2019 and December 29, 2018 totaled $49.7 million and $49.2 million, respectively. As of March 28, 2020, approximately $1.141 billion of revenue from long-term contracts primarily in the Security segment was unearned related to customer contracts which were not completely fulfilled and will be recognized on a decelerating basis over the next five years. This amount excludes any of the Company's contracts with an original expected duration of one year or less.

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