Customer Financing (Policies)

12 Months Ended

Dec. 31, 2020

Customer Financing [Abstract]

Impaired Financing Receivable, Policy

We determine a receivable is impaired when, based on current information and events, it is probable that we will be unable to collect amounts due according to the original contractual terms. At December 31, 2020 and 2019, we individually evaluated for impairment customer financing receivables of $391 and $400, of which $380 and $388 were determined to be impaired. We recorded no allowance for losses on these impaired receivables as the collateral values exceeded the carrying values of the receivables.

Financing Receivable, Allowance for Credit Losses, Policy for Uncollectible Amounts

We determine a receivable is past due when cash has not been received upon the due date specified in the contract. There were no past due customer financing receivables as of December 31, 2020.

We evaluate the collectability of customer financing receivables at commencement and on a recurring basis. If a customer financing receivable is deemed uncollectible, the customer is categorized as non-accrual status. When a customer is in non-accrual status at commencement, sales-type lease revenue is deferred until substantially all cash has been received or the customer is removed from non-accrual status. If a customer status changes to non-accrual after commencement or is a direct finance lease and sufficient collateral is available, we recognize contractual interest income as payments are received to the extent payments exceed past due principal payments. If there is not sufficient collateral, then revenue is not recognized until payments exceed the principal balance. Receivables in non-accrual status as of December 31, 2020 and December 31, 2019 were $380 and $388. Interest income received for the twelve and three months ended December 31, 2020 was $34 and $8.

The adequacy of the allowance for losses is assessed quarterly. Four primary factors influencing the level of our allowance for losses on customer financing receivables are customer credit ratings, default rates, expected loss rate and collateral values, which may be adversely affected by impacts that COVID-19 has on our customers. We assign internal credit ratings for all customers and determine the creditworthiness of each customer based upon publicly available information and information obtained directly from our customers. Our rating categories are comparable to those used by the major credit rating agencies.

Our allowance for losses on receivables decreased from $8 to $5 on January 1, 2020 upon adoption of ASU 2016-13.