Financing Receivables (Tables)
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12 Months Ended |
Dec. 31, 2020 |
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| Financing Receivables |
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| Summary of the components of financing receivables |
| | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | | | Client Financing Receivables | | | | | | | | | Client Loan and | | Investment in | | | | | | | | Installment Payment | | Sales-Type and | | Commercial | | | | | | Receivables/ | | Direct Financing | | Financing | | | | At December 31, 2020: | | (Loans) | | Leases | | Receivables | | Total | Financing receivables, gross | | $ | 12,159 | | $ | 4,001 | | $ | 2,419 | | $ | 18,580 | Unearned income | | | (488) | | | (335) | | | 0 | | | (823) | Residual value* | | | — | | | 485 | | | — | | | 485 | Amortized cost | | $ | 11,671 | | $ | 4,151 | | $ | 2,419 | | $ | 18,242 | Allowance for credit losses | | | (173) | | | (82) | | | (8) | | | (263) | Total financing receivables, net | | $ | 11,498 | | $ | 4,069 | | $ | 2,411 | | $ | 17,979 | Current portion | | $ | 6,955 | | $ | 1,525 | | $ | 2,411 | | $ | 10,892 | Noncurrent portion | | $ | 4,542 | | $ | 2,544 | | $ | — | | $ | 7,086 | | | | | | | | | | | | | |
* Includes guaranteed and unguaranteed residual value. | | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | | | Client Financing Receivables | | | | | | | | | Client Loan and | | Investment in | | | | | | | | Installment Payment | | Sales-Type and | | Commercial | | | | | | Receivables/ | | Direct Financing | | Financing | | | | At December 31, 2019: | | (Loans) | | Leases | | Receivables | | Total | Financing receivables, gross | | $ | 13,592 | | $ | 6,077 | | $ | 3,836 | | $ | 23,504 | Unearned income | | | (570) | | | (509) | | | (4) | | | (1,083) | Recorded investment | | $ | 13,022 | | $ | 5,567 | | $ | 3,831 | | $ | 22,421 | Allowance for credit losses | | | (138) | | | (72) | | | (11) | | | (221) | Unguaranteed residual value | | | — | | | 652 | | | — | | | 652 | Guaranteed residual value | | | — | | | 53 | | | — | | | 53 | Total financing receivables, net | | $ | 12,884 | | $ | 6,199 | | $ | 3,820 | | $ | 22,904 | Current portion | | $ | 8,037 | | $ | 2,334 | | $ | 3,820 | | $ | 14,192 | Noncurrent portion | | $ | 4,847 | | $ | 3,865 | | $ | — | | $ | 8,712 | | | | | | | | | | | | | |
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| Schedule of financing receivables and allowance for credit losses by class |
| | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | At December 31, 2020: | | Americas | | EMEA | | Asia Pacific | | Total | Amortized cost | | $ | 7,758 | | $ | 5,023 | | $ | 3,042 | | $ | 15,822 | Allowance for credit losses | | | | | | | | | | | | | Beginning balance at December 31, 2019 | | $ | 120 | | $ | 54 | | $ | 36 | | $ | 210 | Adjustment for adoption of new standard | | | 21 | | | 15 | | | 5 | | | 41 | Beginning balance at January 1, 2020 | | $ | 142 | | $ | 69 | | $ | 41 | | $ | 252 | Write-offs | | | (28) | | | (3) | | | (3) | | | (34) | Recoveries | | | 0 | | | 0 | | | 2 | | | 3 | Additions/(releases) | | | 33 | | | 5 | | | (4) | | | 34 | Other* | | | (6) | | | 6 | | | 1 | | | 1 | Ending balance at December 31, 2020 | | $ | 141 | | $ | 77 | | $ | 37 | | $ | 255 | | | | | | | | | | | | | |
* Primarily represents translation adjustments. | | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | At December 31, 2019: | | Americas | | EMEA | | Asia Pacific | | Total | Recorded investment | | | | | | | | | | | | | Lease receivables | | $ | 3,419 | | $ | 1,186 | | $ | 963 | | $ | 5,567 | Loan receivables | | | 6,726 | | | 3,901 | | | 2,395 | | | 13,022 | Ending balance | | $ | 10,144 | | $ | 5,087 | | $ | 3,359 | | $ | 18,590 | Recorded investment, collectively evaluated for impairment | | $ | 10,032 | | $ | 5,040 | | $ | 3,326 | | $ | 18,399 | Recorded investment, individually evaluated for impairment | | $ | 112 | | $ | 47 | | $ | 32 | | $ | 191 | Allowance for credit losses | | | | | | | | | | | | | Beginning balance at January 1, 2019 | | | | | | | | | | | | | Lease receivables | | $ | 53 | | $ | 22 | | $ | 24 | | $ | 99 | Loan receivables | | | 105 | | | 43 | | | 32 | | | 179 | Total | | $ | 158 | | $ | 65 | | $ | 56 | | $ | 279 | Write-offs | | | (42) | | | (3) | | | (18) | | | (63) | Recoveries | | | 1 | | | 0 | | | 1 | | | 2 | Additions/(releases) | | | 5 | | | (7) | | | (3) | | | (5) | Other* | | | (1) | | | 0 | | | (1) | | | (2) | Ending balance at December 31, 2019 | | $ | 120 | | $ | 54 | | $ | 36 | | $ | 210 | Lease receivables | | $ | 33 | | $ | 23 | | $ | 16 | | $ | 72 | Loan receivables | | $ | 88 | | $ | 31 | | $ | 20 | | $ | 138 | Related allowance, collectively evaluated for impairment | | $ | 25 | | $ | 11 | | $ | 4 | | $ | 39 | Related allowance, individually evaluated for impairment | | $ | 96 | | $ | 43 | | $ | 32 | | $ | 171 | | | | | | | | | | | | | |
* Primarily represents translation adjustments.
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| Schedule of past due financing receivables |
| | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | | | | | | | | | | | | | Amortized | | Billed | | Amortized | | | | Total | | Amortized | | Cost | | Invoices | | Cost | | | | Amortized | | Cost | | > 90 Days and | | > 90 Days and | | Not | | At December 31, 2020: | | Cost | | > 90 Days | (1) | Accruing | (1) | Accruing | | Accruing | (2) | Americas | | $ | 7,758 | | $ | 295 | | $ | 200 | | $ | 12 | | $ | 96 | | EMEA | | | 5,023 | | | 119 | | | 28 | | | 5 | | | 95 | | Asia Pacific | | | 3,042 | | | 42 | | | 12 | | | 4 | | | 32 | | Total client financing receivables | | $ | 15,822 | | $ | 456 | | $ | 241 | | $ | 20 | | $ | 223 | | | | | | | | | | | | | | | | | | |
| (1) | At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. |
| (2) | Of the amortized cost not accruing, there is a related allowance of $178 million. Financing income recognized on these receivables was immaterial for the year ended December 31, 2020. |
| | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | | | | | | | | | | | | | Recorded | | Billed | | Recorded | | | | Total | | Recorded | | Investment | | Invoices | | Investment | | | | Recorded | | Investment | | > 90 Days and | | > 90 Days and | | Not | | At December 31, 2019: | | Investment | | > 90 Days | (1) | Accruing | (1) | Accruing | | Accruing | (2) | Americas | | $ | 3,419 | | $ | 187 | | $ | 147 | | $ | 11 | | $ | 41 | | EMEA | | | 1,186 | | | 28 | | | 13 | | | 2 | | | 17 | | Asia Pacific | | | 963 | | | 19 | | | 7 | | | 1 | | | 11 | | Total lease receivables | | $ | 5,567 | | $ | 234 | | $ | 168 | | $ | 14 | | $ | 69 | | Americas | | $ | 6,726 | | $ | 127 | | $ | 71 | | $ | 11 | | $ | 72 | | EMEA | | | 3,901 | | | 77 | | | 8 | | | 3 | | | 72 | | Asia Pacific | | | 2,395 | | | 26 | | | 6 | | | 2 | | | 21 | | Total loan receivables | | $ | 13,022 | | $ | 231 | | $ | 85 | | $ | 15 | | $ | 166 | | Total | | $ | 18,590 | | $ | 465 | | $ | 253 | | $ | 29 | | $ | 235 | | | | | | | | | | | | | | | | | | |
| (1) | At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. |
| (2) | Of the recorded investment not accruing, $191 million is individually evaluated for impairment with a related allowance of $171 million. Financing income on these receivables was immaterial for the year ended December 31, 2019. |
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| Schedule of amortized cost/net recorded investment by credit quality indicator |
| | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | Americas | | EMEA | | Asia Pacific | At December 31, 2020: | | Aaa - Baa3 | | Ba1 - D | | Aaa - Baa3 | | Ba1 - D | | Aaa - Baa3 | | Ba1 - D | Vintage year: | | | | | | | | | | | | | | | | | | | 2020 | | $ | 2,818 | | $ | 1,449 | | $ | 1,513 | | $ | 1,427 | | $ | 958 | | $ | 351 | 2019 | | | 988 | | | 623 | | | 668 | | | 519 | | | 564 | | | 123 | 2018 | | | 829 | | | 360 | | | 329 | | | 245 | | | 419 | | | 167 | 2017 | | | 285 | | | 154 | | | 70 | | | 128 | | | 205 | | | 52 | 2016 | | | 90 | | | 52 | | | 33 | | | 46 | | | 114 | | | 33 | 2015 and prior | | | 28 | | | 81 | | | 22 | | | 22 | | | 38 | | | 18 | Total | | $ | 5,038 | | $ | 2,720 | | $ | 2,635 | | $ | 2,387 | | $ | 2,298 | | $ | 743 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | Lease Receivables | | Loan Receivables | At December 31, 2019: | | Americas | | EMEA | | Asia Pacific | | Americas | | EMEA | | Asia Pacific | Credit rating | | | | | | | | | | | | | | | | | | | Aaa—Aa3 | | $ | 465 | | $ | 54 | | $ | 43 | | $ | 1,028 | | $ | 193 | | $ | 189 | A1—A3 | | | 750 | | | 181 | | | 454 | | | 1,186 | | | 395 | | | 892 | Baa1—Baa3 | | | 955 | | | 409 | | | 147 | | | 1,882 | | | 1,527 | | | 619 | Ba1—Ba2 | | | 746 | | | 326 | | | 154 | | | 1,513 | | | 921 | | | 388 | Ba3—B1 | | | 215 | | | 140 | | | 101 | | | 471 | | | 564 | | | 205 | B2—B3 | | | 242 | | | 50 | | | 47 | | | 522 | | | 253 | | | 72 | Caa—D | | | 13 | | | 2 | | | 2 | | | 36 | | | 18 | | | 10 | Total | | $ | 3,385 | | $ | 1,162 | | $ | 947 | | $ | 6,638 | | $ | 3,871 | | $ | 2,376 | | | | | | | | | | | | | | | | | | | |
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