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Notes to the Financial Statements
Ford Motor Company | 2010 Annual Report 105
NOTE 7. FINANCE RECEIVABLES (Continued)
Performance of non-consumer receivables is evaluated based on Ford Credit's internal dealer risk rating analysis, as
payment for wholesale receivables generally is not required until the dealer has sold the vehicle inventory. Wholesale and
dealer loan receivables with the same dealer customer share the same risk rating. The credit quality analysis of
wholesale and dealer loan receivables at December 31, 2010 was as follows (in millions):
Wholesale
WholesaleWholesale
Wholesale
Dealer Loan
Dealer LoanDealer Loan
Dealer Loan
North America
North AmericaNorth America
North America
Group I................................................................................................
................................
$ 10,540 $ 785
Group II................................................................................................
................................
2,372 208
Group III................................................................................................
................................
353 107
Group IV ................................................................................................
................................
8 17
Sub-total ................................................................................................
................................
13,273 1,117
International
InternationalInternational
International
Group I................................................................................................
................................
5,135 5
Group II................................................................................................
................................
2,189 15
Group III................................................................................................
................................
1,527 12
Group IV ................................................................................................
................................
— 1
Sub-total ................................................................................................
................................
8,851 33
Total................................................................................................
................................
$ 22,124 $ 1,150
Non-Accrual. The accrual of revenue is discontinued at the time a receivable is determined to be uncollectible, at
bankruptcy status notification, or at 120 days past due. Finance receivable accounts may be restored to accrual status
only when a customer settles all past-due deficiency balances and future payments are reasonably assured. For
receivables in non-accrual status, subsequent financing revenue is recognized only to the extent a payment is received.
Payments are generally applied first to outstanding interest and then to the unpaid principal balance.
Consumer receivables in non-accrual status at December 31, 2010 were as follows (in millions):
Retail
RetailRetail
Retail
Direct Financing
Direct Financing Direct Financing
Direct Financing
Leases
LeasesLeases
Leases
North America
North AmericaNorth America
North America
Greater than 120 days past due................................................................................................
................................
$ 82 $ —
Less than 120 days past due ................................................................................................
................................
355 —
Sub-total ................................................................................................................................
................................
437 —
International
InternationalInternational
International
Greater than 120 days past due................................................................................................
................................
19 3
Less than 120 days past due ................................................................................................
................................
26 1
Sub-total ................................................................................................................................
................................
45 4
Total recorded investment in consumer receivables in non-accrual status................................
............................
$ 482 $ 4
Finance receivables greater than 90 days past due and still accruing interest reflect $7 million of non-bankrupt retail
accounts in the 91-120 days past due category that are in the process of collection and $1 million of dealer loans.
Impairment. Ford Credit's consumer receivables are collectively evaluated for impairment. Ford Credit's non-
consumer receivables are both collectively and specifically evaluated for impairment. Specifically impaired non-consumer
receivables represent accounts with dealers that have weak or poor financial metrics or dealer loans that have been
modified in troubled debt restructurings. Ford Credit places impaired receivables in non-accrual status. The following
factors (not necessarily in the order of importance or probability of occurrence) are considered in determining whether a
receivable is impaired:
• Delinquency in contractual payments of principal or interest
• Deterioration of the borrower’s competitive position
• Cash flow difficulties experienced by the borrower
• Breach of loan covenants or conditions
• Initiation of dealer bankruptcy proceedings
• Fraud or criminal conviction