Quarterly report pursuant to Section 13 or 15(d)

Financing Receivables

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Financing Receivables
9 Months Ended
Sep. 30, 2019
Receivables [Abstract]  
Financing Receivables

NOTE 6 - FINANCING RECEIVABLES

 

Financing receivables consist of sales-type lease receivables from the sale of the Company’s products and services. The present value of net investment in sales-type lease receivable is principally for three- to five-year leases of I.D. Systems’ products and is reflected net of unearned interest income of $114,000 and $83,000 at December 31, 2018 and September 30, 2019, respectively, at a weighted-average discount rate of 3%.

 

Scheduled maturities of sales-type lease minimum lease payments outstanding as of September 30, 2019 are as follows:

 

Year ending December 31:      
       
October - December 2019   $ 253,000  
2020     876,000  
2021     471,000  
2022     213,000  
2023     91,000  
Thereafter     18,000  
         
      1,922,000  
Less: Current portion     950,000  
         
Sales-type lease receivable - less current portion   $ 972,000  

 

The allowance for doubtful accounts represents I.D. Systems’ best estimate of the amount of credit losses in I.D. Systems’ existing sales-type lease receivables. The allowance for doubtful accounts is determined on an individual lease basis if it is probable that I.D. Systems will not collect all principal and interest contractually due. I.D. Systems considers its customers’ financial condition and historical payment patterns in determining the customers’ probability of default. The impairment is measured based on the present value of expected future cash flows discounted at the lease’s effective interest rate. There were no impairment losses recognized for the three- and nine-month periods ended September 30, 2018 and 2019. I.D. Systems does not accrue interest when a lease is considered impaired. When the ultimate collectability of the principal balance of the impaired lease is in doubt, all cash receipts on impaired leases are applied to reduce the principal amount of such leases until the principal has been recovered and are recognized as interest income thereafter. Impairment losses are charged against the allowance and increases in the allowance are charged to bad debt expense. Leases are written off against the allowance when all possible means of collection have been exhausted and the potential for recovery is considered remote. I.D. Systems resumes accrual of interest income when it is probable that I.D. Systems will collect the remaining principal and interest of an impaired lease. Leases become past due based on how recently payments have been received.