Finance receivables, net consist of retail and dealer accounts including accrued interest and deferred fees and costs, net of the allowance for credit losses and deferred income. Securitized receivables represent retail loan receivables that have been sold for legal purposes to securitization trusts but continue to be included in our consolidated financial statements. Cash flows from these securitized receivables are available only for the repayment of debt issued by these trusts and other obligations arising from the securitization transactions. They are not available for payment of our other obligations or to satisfy claims of our other creditors.

(Dollars in millions)			December 31, 2014		March 31, 2014
Retail receivables			$	41,383	$	40,216
Securitized retail receivables				9,757		9,633
Dealer financing				16,060		15,925
				67,200		65,774

Deferred origination (fees) and costs, net				645		651
Deferred income				(920)		(863)
Allowance for credit losses
	Retail and securitized retail receivables			(298)		(298)
	Dealer financing			(79)		(88)
		Total allowance for credit losses		(377)		(386)
Finance receivables, net			$	66,548	$	65,176

Finance receivables, net and retail receivables presented in the previous table includes direct finance leases, net of $299 million and $274 million at December 31, 2014 and March 31, 2014, respectively.

We are exposed to credit risk on our finance receivables. Credit risk is the risk of loss arising from the failure of customers or dealers to meet the terms of their contracts with us or otherwise fail to perform as agreed.

Retail loan and commercial portfolio segments each consist of one class of finance receivables. While we use various credit quality metrics to develop our allowance for credit losses on the retail loan and commercial portfolio segments, we primarily utilize the aging of the individual accounts to monitor the credit quality of these finance receivables. Based on our experience, the payment status of borrowers is the strongest indicator of the credit quality of the underlying receivables. Payment status also impacts charge-offs.

Individual borrower accounts for each class of finance receivables within the retail loan and commercial portfolio segments are segregated into one of four aging categories based on the number of days outstanding. The aging for each class of finance receivables is updated quarterly.

For the three classes of finance receivables within the dealer products portfolio segment (wholesale, real estate and working capital), all loans outstanding for an individual dealer or dealership group, which includes affiliated entities, are aggregated and evaluated collectively by dealer or dealer group. This reflects the interconnected nature of financing provided to our individual dealer and dealer group customers, and their affiliated entities.

When assessing the credit quality of the finance receivables within the dealer products portfolio segment, we segregate the finance receivables account balances into four categories representing distinct credit quality indicators based on internal risk assessments. The internal risk assessments for all finance receivables within the dealer products portfolio segment are updated on a monthly basis.

The tables below present each credit quality indicator by class of finance receivables as of December 31, 2014 and March 31, 2014:

		Retail Loan				Commercial
(Dollars in millions)		December 31, 2014		March 31, 2014		December 31, 2014		March 31, 2014

Aging of finance receivables:
	Current	$	49,779	$	48,828	$	494	$	432
	30-59 days past due		668		459		8		6
	60-89 days past due		144		90		1		1
	90 days or greater past due		46		33		-		-
Total		$	50,637	$	49,410	$	503	$	439

		Wholesale				Real Estate				Working Capital
(Dollars in millions)		December 31, 2014		March 31, 2014		December 31, 2014		March 31, 2014		December 31, 2014		March 31, 2014

Credit quality indicators:
	Performing	$	8,372	$	8,129	$	3,970	$	3,791	$	1,712	$	1,642
	Credit Watch		1,094		1,282		722		855		149		158
	At Risk		15		24		-		12		22		25
	Default		-		1		4		-		-		6
Total		$	9,481	$	9,436	$	4,696	$	4,658	$	1,883	$	1,831

Note 4 – Finance Receivables, Net (Continued)

Impaired Finance Receivables

The following table summarizes the information related to our impaired loans by class of finance receivables as of December 31, 2014 and March 31, 2014:

	Impaired								Individually Evaluated
	Finance Receivables				Unpaid Principal Balance				Allowance
	December 31,		March 31,		December 31,		March 31,		December 31,		March 31,
(Dollars in millions)	2014		2014		2014		2014		2014		2014

Impaired account balances individually evaluated for impairment with an allowance:

Wholesale	$	15	$	13	$	15	$	13	$	2	$	1
Real estate		14		27		14		27		4		8
Working capital		22		23		22		23		22		22
Total	$	51	$	63	$	51	$	63	$	28	$	31

Impaired account balances individually evaluated for impairment without an allowance:

Wholesale	$	72	$	51	$	72	$	51
Real estate		83		90		83		90
Working capital		3		4		3		4
Total	$	158	$	145	$	158	$	145

Impaired account balances aggregated and evaluated for impairment:

Retail loan	$	277	$	322	$	273	$	318
Commercial		1		1		1		1
Total	$	278	$	323	$	274	$	319

Total impaired account balances:

Retail loan	$	277	$	322	$	273	$	318
Commercial		1		1		1		1
Wholesale		87		64		87		64
Real estate		97		117		97		117
Working capital		25		27		25		27
Total	$	487	$	531	$	483	$	527

As of December 31, 2014 and March 31, 2014, the impaired finance receivables balance for accounts in the dealer products portfolio segment that were on nonaccrual status was $43 million and $54 million, respectively, and there were no charge-offs against the allowance for credit losses. Therefore, the impaired finance receivables balance is equal to the unpaid principal balance.

The following table summarizes the average impaired finance receivables as of the balance sheet date and the interest income recognized on these loans during the three and nine months ended December 31, 2014 and 2013:

	Average Impaired Finance Receivables								Interest Income Recognized
	Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended December 31,				Nine Months Ended December 31,
(Dollars in millions)	2014		2013		2014		2013		2014		2013		2014		2013

Impaired account balances individually evaluated for impairment with an allowance:

Wholesale	$	17	$	15	$	17	$	17	$	-	$	-	$	-	$	-
Real estate		14		31		20		33		-		-		-		1
Working capital		23		23		23		24		-		-		1		1
Total	$	54	$	69	$	60	$	74	$	-	$	-	$	1	$	2

Impaired account balances individually evaluated for impairment without an allowance:

Wholesale	$	62	$	61	$	56	$	61	$	-	$	1	$	1	$	1
Real estate		89		92		91		93		1		1		2		3
Working capital		3		4		3		5		-		-		-		-
Total	$	154	$	157	$	150	$	159	$	1	$	2	$	3	$	4

Impaired account balances aggregated and evaluated for impairment:

Retail loan	$	284	$	355	$	301	$	379	$	5	$	7	$	17	$	22
Commercial		1		1		1		1		-		-		-		-
Total	$	285	$	356	$	302	$	380	$	5	$	7	$	17	$	22

Total impaired account balances:

Retail loan	$	284	$	355	$	301	$	379	$	5	$	7	$	17	$	22
Commercial		1		1		1		1		-		-		-		-
Wholesale		79		76		73		78		-		1		1		1
Real estate		103		123		111		126		1		1		2		4
Working capital		26		27		26		29		-		-		1		1
Total	$	493	$	582	$	512	$	613	$	6	$	9	$	21	$	28

The primary source of interest income recognized on the loans in the table above is from performing troubled debt restructurings. In addition, interest income recognized using a cash-basis method of accounting during the three and nine months ended December 31, 2014 and 2013 was not significant.

For accounts not under bankruptcy protection, the amount of finance receivables modified as a troubled debt restructuring during the three and nine months ended December 31, 2014 and 2013 is not significant for each class of finance receivables. Troubled debt restructurings for non-bankrupt accounts within the retail loan class of finance receivables are comprised exclusively of contract term extensions that reduce the monthly payment due from the customer. Troubled debt restructurings for accounts within the commercial class of finance receivables consist of contract term extensions, interest rate adjustments, or a combination of the two. For the three classes of finance receivables within the dealer products portfolio segment, troubled debt restructurings include contract term extensions, interest rate adjustments, waivers of loan covenants, or any combination of the three. Troubled debt restructurings of accounts not under bankruptcy protection did not include forgiveness of principal during the three and nine months ended December 31, 2014 and 2013.

We consider finance receivables under bankruptcy protection within the retail loan and commercial classes to be troubled debt restructurings as of the date we receive notice of a customer filing for bankruptcy protection regardless of the ultimate outcome of the bankruptcy proceedings. The bankruptcy court may impose modifications as part of the proceedings, including interest rate adjustments and forgiveness of principal. For the three and nine months ended December 31, 2014 and 2013, the financial impact of troubled debt restructurings related to accounts under bankruptcy protection was not significant to our Consolidated Statement of Income and Consolidated Balance Sheet.

Finance receivables modified as troubled debt restructurings for which there was a subsequent payment default during the three and nine months ended December 31, 2014 and 2013, and for which the modification occurred within twelve months of the payment default, were not significant for all classes of such receivables.