FINANCING RECEIVABLES AND OPERATING LEASES |
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FINANCING RECEIVABLES AND OPERATING LEASES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING RECEIVABLES AND OPERATING LEASES |
3. FINANCING RECEIVABLES AND OPERATING LEASES
Our financing receivables and operating leases consist primarily of leases of IT and communication equipment and notes receivable from financing
customer purchases of third-party software, maintenance, and services. Our leases often include elections for the lessee to purchase the underlying asset at the end of the lease term. Occasionally, our leases provide the lessee a bargain purchase
option.
The following table provides the profit recognized for sales-type leases at their commencement date, including modifications that are recognized on a
net basis, for the years ended March 31, 2022, and 2021 (in thousands):
The following table provides interest income in aggregate on our sales-type leases and lease income on our
operating leases for the years ended March 31, 2022, and 2021 (in thousands):
FINANCING RECEIVABLES—NET
The following tables provide a disaggregation of our financing receivables - net (in thousands):
The following table provides the future scheduled minimum lease payments for investments in sales-type leases as of March 31, 2022 (in thousands):
OPERATING LEASES—NET
Operating leases—net represents leases that do not qualify as sales-type leases. The components of the operating leases—net are as
follows (in thousands):
The following table provides the future scheduled minimum lease rental payments for operating leases as of March 31, 2022 (in thousands):
TRANSFERS OF FINANCIAL ASSETS
We enter into arrangements to transfer the contractual payments due under financing receivables and operating lease agreements, which are accounted for as secured
borrowings.
For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of March 31, 2022, and March 31,
2021, we had financing receivables of $21.1 million and $60.5 million, respectively, and operating leases of $2.0 million and $3.3 million, respectively which were collateral for non-recourse notes payable. See Note 8, “Notes Payable and Credit Facility.”
For transfers accounted for as sales, we derecognize the carrying value of the asset transferred plus any liability and recognize a net gain or loss on the sale, which are
presented within net sales in the consolidated statement of operations. For the years ended March 31, 2022, 2021, and 2020, we recognized net gains of $18.2 million, $14.5 million, and $21.8 million, respectively, and total proceeds from these sales were $855.1 million, $364.0 million, and $593.7 million, respectively.
When we retain servicing obligations in transfers accounted for as sales, we allocate a portion of the proceeds to deferred revenues, which is recognized as we perform the
services. As of March 31, 2022, and March 31, 2021, we had deferred revenue of $0.5 million and $0.4 million, respectively, for servicing obligations.
In a limited number of transfers accounted for as sales, we indemnified the assignee in
the event that the lessee elects to early terminate the lease. As of March 31, 2022, our total potential liability that could result from these indemnities is immaterial.
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