Credit Losses

12 Months Ended

May 31, 2021

Credit Loss [Abstract]

Credit Losses

NOTE 3: 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 $577 million in 2021, $442 million in 2020 and $295 million in 2019. Our allowance for credit losses was $358 million as of May 31, 2021 and $175 million at May 31, 2020.