v3.25.2
Financing Receivables (Tables)
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
Summary of the components of financing receivables
A summary of the components of the company’s financing receivables is presented as follows:
Client Financing Receivables
Client Loan and Installment Payment ReceivablesInvestment in Sales-Type and Direct Financing
Commercial Financing Receivables
(Dollars in millions)Held forHeld for
At June 30, 2025(Loans)LeasesInvestment
Sale (1)
Total
Financing receivables, gross$8,060 $3,769 $541 $746 $13,116 
Unearned income(645)(401)— — (1,045)
Unguaranteed residual value— 574 — — 574 
Amortized cost$7,415 $3,942 $541 $746 $12,644 
Allowance for credit losses(69)(67)(5)— (141)
Total financing receivables, net$7,346 $3,875 $536 $746 $12,503 
Current portion$3,561 $1,489 $536 $746 $6,333 
Noncurrent portion$3,785 $2,386 $— $— $6,171 
Client Financing Receivables
Client Loan and Installment Payment ReceivablesInvestment in Sales-Type and Direct Financing
Commercial Financing Receivables
(Dollars in millions)Held forHeld for
At December 31, 2024(Loans)LeasesInvestment
Sale (1)
Total
Financing receivables, gross$7,425 $3,406 $1,322 $900 $13,052 
Unearned income(547)(344)— — (891)
Unguaranteed residual value— 479 — — 479 
Amortized cost$6,878 $3,540 $1,322 $900 $12,639 
Allowance for credit losses(73)(50)(5)— (128)
Total financing receivables, net$6,804 $3,491 $1,317 $900 $12,512 
Current portion$3,535 $1,408 $1,317 $900 $7,159 
Noncurrent portion$3,269 $2,083 $— $— $5,353 
(1)The carrying value of the receivables classified as held for sale approximates fair value.
Schedule of transfer of commercial financing assets
The following table presents the total amount of commercial financing receivables transferred.
(Dollars in millions)
For the six months ended June 30:20252024
Commercial financing receivables:
Receivables transferred during the period$3,715 $3,686 
Receivables uncollected at end of period (1)
$686 $786 
(1)Of the total amount of commercial financing receivables sold and derecognized from the Consolidated Balance Sheet, the amounts presented remained uncollected from business partners as of June 30, 2025 and 2024.
Schedule of client financing receivables and allowance for credit losses by class
The following tables present the amortized cost basis for client financing receivables at June 30, 2025 and December 31, 2024, further segmented by three classes: Americas, Europe/Middle East/Africa (EMEA) and Asia Pacific. The commercial financing receivables portfolio segment is excluded from the tables in the sections below as the receivables are short term in nature and the current estimated risk of loss and resulting impact to the company’s financial results are not material.
(Dollars in millions)    
At June 30, 2025:AmericasEMEAAsia PacificTotal
Amortized cost$6,293 $3,515 $1,549 $11,357 
Allowance for credit losses:    
Beginning balance at January 1, 2025$69 $45 $9 $123 
Write-offs$(14)$0 $0 $(14)
Recoveries0 0 0 0 
Additions/(releases)9 5 2 16 
Other (1)
5 6 0 11 
Ending balance at June 30, 2025$69 $56 $11 $136 
(1)Primarily represents translation adjustments.
(Dollars in millions)    
At December 31, 2024:AmericasEMEAAsia PacificTotal
Amortized cost$5,861 $3,128 $1,429 $10,418 
Allowance for credit losses:   
Beginning balance at January 1, 2024$92 $48 $11 $150 
Write-offs$(2)$(1)$0 $(3)
Recoveries1 0 0 1 
Additions/(releases)(10)0 (2)(12)
Other (1)
(11)(2)0 (14)
Ending balance at December 31, 2024$69 $45 $9 $123 
(1)Primarily represents translation adjustments.
Schedule of past due client financing receivables
(Dollars in millions)Total
Amortized
Cost
Amortized
Cost
> 90 Days (1)
Amortized
Cost
> 90 Days and
Accruing (1)
Billed
Invoices
> 90 Days and
Accruing
Amortized
Cost
Not
Accruing (2)
At June 30, 2025:
Americas$6,293 $56 $8 $1 $50 
EMEA3,515 32 1 0 32 
Asia Pacific1,549 10 3 0 7 
Total client financing receivables$11,357 $99 $12 $2 $90 
(Dollars in millions)Total
Amortized
Cost
Amortized
Cost
> 90 Days (1)
Amortized
Cost
> 90 Days and
Accruing (1)
Billed
Invoices
> 90 Days and
Accruing
Amortized
Cost
Not
Accruing (2)
At December 31, 2024:
Americas$5,861 $66 $7 $1 $62 
EMEA3,128 29 1 0 28 
Asia Pacific1,429 8 0 0 7 
Total client financing receivables$10,418 $103 $8 $1 $97 
(1)At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days.
(2)Of the amortized cost not accruing, there was a related allowance of $88 million and $94 million at June 30, 2025 and December 31, 2024, respectively. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2025 and 2024, respectively.
Schedule of amortized cost by credit quality indicator
The following tables present the amortized cost basis for client financing receivables by credit quality indicator at June 30, 2025 and December 31, 2024, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by customers which reduce the risk to IBM. Gross write-offs by vintage year at June 30, 2025 and December 31, 2024 were not material.
(Dollars in millions)AmericasEMEAAsia Pacific
At June 30, 2025:Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Vintage year:      
2025$2,058 $251 $774 $208 $385 $64 
20241,545 332 944 461 469 57 
2023926 297 295 216 252 14 
2022587 68 302 130 191 21 
2021127 11 83 16 49 3 
2020 and prior40 50 42 46 31 14 
Total$5,282 $1,010 $2,439 $1,076 $1,377 $172 
(Dollars in millions)AmericasEMEAAsia Pacific
At December 31, 2024:Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Aaa – Baa3
Ba1 – C
Vintage year:      
2024$2,080 $621 $1,145 $514 $616 $77 
20231,372 310 341 258 285 19 
2022950 113 408 194 254 26 
2021233 24 125 27 69 5 
202043 17 29 15 36 8 
2019 and prior53 44 37 35 26 7 
Total$4,732 $1,129 $2,085 $1,043 $1,287 $142