Credit Losses

9 Months Ended

Feb. 28, 2021

Credit Loss [Abstract]

Credit Losses

(2) Credit Losses

We are exposed to credit losses primarily through our trade receivables. We assess ability to pay for certain customers by conducting a credit review, which considers the customer’s established credit rating and our assessment of creditworthiness. We determine the allowance for credit losses on accounts receivable using a combination of specific reserves for accounts that are deemed to exhibit credit loss indicators and general reserves that are determined using loss rates based on historical write-offs by geography and recent forecast information, including underlying economic expectations. We update our estimate of credit loss reserves quarterly, considering recent write-offs, collections information and underlying economic expectations.

Credit losses were $137 million for the three-month period ended February 28, 2021 and $428 million for the nine-month period ended February 28, 2021. Credit losses were $87 million for the three-month period ended February 29, 2020 and $295 million for the nine-month period ended February 29, 2020. Our allowance for credit losses was $329 million as of February 28, 2021 and $175 million at May 31, 2020.