Financing receivables represent sales-type and direct-financing leases resulting from the placement of HP and third-party products. These receivables typically have terms from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The components of net financing receivables, which are included in financing receivables and long-term financing receivables and other assets, were as follows:

	July 31, 2011			October 31, 2010

	In millions
Minimum lease payments receivable	$	7,675		$	7,094
Allowance for doubtful accounts		(136	)		(140	)
Unguaranteed residual value		236			212
Unearned income		(661	)		(596	)

Financing receivables, net		7,114			6,570
Less current portion		(3,167	)		(2,986	)

Amounts due after one year, net	$	3,947		$	3,584

Equipment leased to customers under operating leases was $4.0 billion and $3.5 billion at July 31, 2011 and October 31, 2010, respectively, and is included in machinery and equipment. Accumulated depreciation on equipment under lease was $1.3 billion at July 31, 2011 and $1.0 billion at October 31, 2010, respectively.

In July 2010, the Financial Accounting Standards Board issued amendments to the disclosure requirements pertaining to the credit quality of financing receivables and the allowance for credit losses. The amendments require disclosures related to the credit risk inherent in an entity's portfolio of financing receivables and how that risk is analyzed and assessed in arriving at the allowance for credit losses. The amendments also require enhanced disclosures related to changes in the allowance for credit losses and the reasons for those changes. HP adopted this new standard in the first quarter of fiscal 2011.

Due to the homogenous nature of the leasing transactions, HP manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising HP's customer base and their dispersion across many different industries and geographical regions. The credit quality of an obligor is evaluated at lease inception and monitored over the term of a transaction. Risk ratings are assigned to each lease based on the creditworthiness of the obligor and other variables that augment or diminish the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of guarantees, letters of credit, security deposits or other credit enhancements.

The credit risk profile of the gross financing receivables, based on internally assigned ratings, was as follows:

	July 31, 2011		October 31, 2010

	In millions
Risk Rating
Low	$	4,239	$	3,793
Moderate		2,947		2,829
High		64		88

Total	$	7,250	$	6,710

Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB- or higher, while accounts rated moderate risk would be the equivalent of BB+ or lower. Based upon impairment analyses, HP identifies and monitors accounts rated high risk and establishes specific reserves against a portion of these receivables.

HP establishes an allowance for doubtful accounts to ensure financing receivables are not overstated due to uncollectability. The allowance balance is comprised of a general reserve, which is determined based on a percentage of the financing receivables balance, and a specific reserve, which is established for certain accounts with identified exposures, such as customer default, bankruptcy or other events, that make it unlikely that HP will recover its investment in the lease. The general reserve percentages are maintained on a regional basis and are based on several factors, which include consideration of historical credit losses and portfolio delinquencies, trends in the overall weighted- average risk rating of the portfolio, and information derived from competitive benchmarking.

The allowance for doubtful accounts and the related financing receivables were as follows:

	Nine months ended July 31, 2011

	In millions
Allowance for doubtful accounts
Balance, beginning of period	$	140
Additions to allowance		34
Deductions, net of recoveries		(38	)

Balance, end of period	$	136

		July 31, 2011		October 31, 2010

		In millions
Allowance for financing receivables individually evaluated for loss		$	47	$	53
Allowance for financing receivables collectively evaluated for loss			89		87

	Total	$	136	$	140

Gross financing receivables individually evaluated for loss		$	72	$	75
Gross financing receivables collectively evaluated for loss			7,178		6,635

	Total	$	7,250	$	6,710

Accounts are generally put on non-accrual status (cessation of interest accrual) when they reach 90 days past due. In certain circumstances, such as when the delinquency is deemed to be of an administrative nature, accounts may still accrue interest when they reach 90 days past due. A write-off or specific reserve is generally recorded when an account reaches 180 days past due. As of July 31, 2011, total financing receivables on non-accrual status were $195 million, and total financing receivables greater than 90 days past due and still accruing interest were $94 million.