Sales-Type Leases

9 Months Ended

Feb. 28, 2015

We have certain customer leases providing bargain purchase options, which are accounted for as sales-type leases. Interest income is recognized over the life of the lease using the effective interest method.

The initial acceptance of customer finance arrangements is based on an in-depth review of each customer’s credit profile, including review of third party credit reports, customer financial statements and bank verifications. We monitor the credit quality of our sales-type lease portfolio based on payment activity that drives the finance lease receivable aging. This credit quality is assessed on a monthly basis. Our historical losses on finance lease receivables are insignificant, and therefore we do not have a specific allowance for credit losses.

The minimum lease payments receivable and the net investment included in other assets for such leases were as follows:



	February 28, 2015			May 31, 2014
Gross minimum lease payments receivable	$	5,725		$	7,543
Less – unearned interest	(227		)	(279		)
Net investment in sales-type lease receivables	$	5,498		$	7,264

The following table provides estimated future minimum lease payments receivable related to sales-type leases:



Year ending May 31,	Future Payments
2015 (remaining)	$	1,103
2016	3,527
2017	957
2018	138
2019	—
	$	5,725