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Notes to the Financial Statements
100 Ford Motor Company | 2010 Annual Report
NOTE 7. FINANCE RECEIVABLES
Automotive Sector
Our Automotive sector holds notes receivables, which consist primarily of loans with certain suppliers and a loan with
Geely Sweden AB, a subsidiary of Zhejiang Geely Holding Group, Limited (see Note 24). Performance of this group of
receivables is evaluated based on payment activity and the financial stability of the debtor. Notes receivable are initially
recorded at fair value and are subsequently measured at amortized cost. The notes receivable are reported on our sector
balance sheet in Receivables, less allowances and Other assets.
Notes receivable, net at December 31 were as follows (in millions):
2010
20102010
2010
2009
20092009
2009
Notes receivable ................................................................................................................................
.........................
$ 344 $ 268
Less: Allowance for credit losses ................................................................................................
...............................
(120) (192)
Notes receivable, net ................................................................................................................................
..................
$ 224 $ 76
Financial Services Sector
Ford Credit segments their North America and International portfolio of finance receivables into "consumer" and "non-
consumer" receivables. The receivables are secured by the vehicles, inventory, or other property being financed.
Consumer Segment – Receivables in this portfolio segment relate to products offered to individuals and businesses
that finance the acquisition of Ford vehicles from dealers for personal or commercial use. The products include:
• Retail financing – retail installment contracts for new and used vehicles
• Direct financing leases – direct financing leases with retail customers, government entities, daily rental
companies, and fleet customers
Non-Consumer Segment – Receivables in this portfolio segment relate to products offered to dealers. The products
include:
• Wholesale financing – loans to dealers to finance the purchase of vehicle inventory, also known as floorplan
financing
• Dealer loans – loans to dealers to finance working capital, and to finance the purchase of dealership real estate
and/or make improvements to dealership facilities
• Other financing – purchased receivables from Ford and its affiliates, primarily related to the sale of parts and
accessories to dealers
Finance receivables are recorded at the time of origination or purchase for the principal amount financed and are
subsequently reported at amortized cost, net of any allowance for credit losses. Amortized cost is the outstanding
principal adjusted for any charge-offs and any unamortized deferred fees or costs. At December 31, 2010, the recorded
investment in Ford Credit's finance receivables excluded $176 million of accrued uncollected interest receivable, which we
report in Other assets on the balance sheet.