NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2011, 2010 and 2009 (currencies in millions) In assessing market interest rate risk, including benchmark interest rates and credit spreads, the Company considers  its intent for selling the securities and whether it is more likely than not the Company will be able to hold these  securities until the recovery of any unrealized losses. Trade and Other Receivables:  The Company’s trade and other receivables are recorded at cost on the balance sheet,  net of allowances.  Receivables:   Loans –  Loans represent fixed- or floating-rate loans to customers collateralized by the vehicles purchased and are  recorded at amortized cost.  Finance leases –  Finance leases are retail direct financing leases and sales-type finance leases, which lease equipment  to retail customers and dealers. These leases are reported as the sum of minimum lease payments receivable and  estimated residual value of the property subject to the contracts, reduced by unearned interest which is shown  separately.  Finance and Other Receivables: Dealer wholesale financing –  Dealer wholesale financing is floating-rate wholesale loans to PACCAR dealers for new  and used trucks and are recorded at amortized cost. The loans are collateralized by the trucks being financed. Interest and other –  Interest and other receivables are interest on loans and leases and other amounts due within  one year in the normal course of business. Truck and Other:  The Company historically has not experienced significant losses on trade and other receivables in  its Truck and Other businesses. The allowance for credit losses for Truck and Other was $3.2 and $3.5 for the years  ended December 31, 2011 and 2010, respectively, and net charge-offs were $1.1, $.2 and $1.8 for the years ended December 31, 2011, 2010 and 2009, respectively. Financial Services:  The Company continuously monitors the payment performance of all its finance receivables. The  Company evaluates its finance receivables collectively and, in some cases, individually. For large customers and dealers  with wholesale financing, the Company regularly reviews their financial statements and makes site visits and phone  contacts as appropriate. If the Company becomes aware of circumstances that could cause those customers or dealers to  face financial difficulty, whether or not they are past due, the customers are placed on a watch list.  The Company may modify loans and finance leases for commercial reasons or for credit reasons for customers having  difficulty making payments under the contract terms. When customer accounts are modified, the Company thoroughly  evaluates the creditworthiness of the customers and modifies accounts that the Company considers likely to perform  under the modified terms. It is rare for the Company to grant credit modifications for customers that do not meet  minimum underwriting standards since the Company normally repossesses the financed equipment in these  circumstances. The Company’s credit modifications for customers that do not meet minimum underwriting standards are  classified as troubled debt restructurings (TDRs). On average, modifications extend contractual terms less than three  months. Modifications did not have a significant effect on the weighted average term or interest rate of the portfolio.  When granting modifications, the Company rarely forgives principal or interest or reduces interest rates.  The Company has developed a systematic methodology for determining the allowance for credit losses for its two  portfolio segments, retail and wholesale. The retail segment includes retail loans and direct and sales-type finance leases,  net of unearned interest. The wholesale segment includes wholesale financing loans to dealers that are collateralized by  the trucks being financed. The wholesale segment generally has less risk than the retail segment. Wholesale receivables are  Allowance for Credit Losses: