Receivables

Accounts receivable, net, includes the Company's trade receivables, which are recorded based upon the amount the Company expects to receive from its clients, net of an allowance for doubtful accounts. Notes receivable are recorded based upon the amount the Company expects to receive from its clients, net of an allowance for doubtful accounts and unearned income. The allowance for doubtful accounts is the Company's best estimate of probable credit losses related to trade receivables and notes receivable based upon the aging of the receivables, historical collection data, and internal assessments of credit quality, as well as the economy as a whole. The Company charges off uncollectable amounts against the reserve in the period in which it determines they are uncollectable. Unearned income on notes receivable is amortized using the effective interest method.

The Company’s trade and accounts receivables, whose carrying value approximates fair value, are as follows:



	March 31, 2015						June 30, 2014
	Current			Long-term			Current			Long-term
Trade receivables	$	1,599.1		$	—		$	1,457.7		$	—
Notes receivable	18.1			32.9			94.8			169.9
Less:
Allowance for doubtful accounts - trade receivables	(35.3		)	—			(38.1		)	—
Allowance for doubtful accounts - notes receivable	(0.4		)	(0.7		)	(4.7		)	(8.3		)
Unearned income - notes receivable	(0.8		)	(0.9		)	(6.0		)	(6.2		)
	$	1,580.7		$	31.3		$	1,503.7		$	155.4

During the nine months ended March 31, 2015, the Company sold notes receivable related to Dealer Services financing arrangements for $226.7 million. Although the sale of the notes receivable transfers the majority of the risk to the purchaser, the Company does retain a minimal level of credit risk on the sold receivables. The cash received in exchange for the notes receivable sold was recorded within the operating activities on the Statements of Consolidated Cash Flows and the gain on sale realized was recorded within Other income, net on the Statements of Consolidated Earnings (see Note 5).

The Company determines the allowance for doubtful accounts related to notes receivable based upon a specific reserve for known collection issues, as well as a non-specific reserve based upon aging, both of which are based upon history of such losses and current economic conditions. As of March 31, 2015 and June 30, 2014, there were no notes receivable that were specifically reserved; the entire notes receivable reserve balance was comprised of non-specific reserves.

The rollforward of the allowance for doubtful accounts related to notes receivable is as follows:



	Current			Long-term
Balance at June 30, 2014	$	4.7		$	8.3
Net provision	0.3			0.7
Chargeoffs	(0.2		)	(0.4		)
Recoveries and other (A)	(4.4		)	(7.9		)
Balance at March 31, 2015	$	0.4		$	0.7

(A) As a result of the sale of the notes receivable related to Dealer Services financing arrangements, the Company released $10.7 million of non-specific reserves that were accrued on the sold notes receivable, which was recorded in selling, general, and administrative expenses on the Statements of Consolidated Earnings.

The allowance for doubtful accounts as a percentage of notes receivable was approximately 2% as of March 31, 2015 and 5% as of June 30, 2014.

On an ongoing basis, the Company evaluates the credit quality of its financing receivables, utilizing aging of receivables, collection experience, and charge-offs. As events related to a specific client dictate, the credit quality of a client is reevaluated. Approximately 100% of notes receivable were current at March 31, 2015 and June 30, 2014.