NEW ACCOUNTING PRONOUNCEMENTS (Notes)

3 Months Ended

Jan. 31, 2020

Accounting Pronouncements Not Yet Adopted

There were no changes to the new accounting pronouncements not yet adopted as described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2019 except for the following:

In December 2019, the Financial Accounting Standards Board ("FASB") issued new guidance to simplify the accounting for income taxes. This guidance eliminates certain exceptions to existing guidance related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.The new guidance is effective for us beginning November 1, 2021, and for interim periods within that year. Early adoption is permitted. We are evaluating the impact of this guidance on our consolidated financial statements and disclosures.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), which requires lessees to record most leases on the balance sheet as lease liabilities, initially measured at the present value of future lease payments, with a corresponding right-of-use asset. The accounting applied by a lessor is largely unchanged from that applied under the prior

accounting standard.

On November 1, 2019, we adopted the new accounting guidance using the modified retrospective method, by applying the transition approach, for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning November 1, 2019 are presented under the new accounting standard, while prior period amounts have not been restated. The standard had a significant impact on the condensed consolidated balance sheet as of January 31, 2020, but did not have a significant impact on the condensed consolidated statement of operations or condensed consolidated statement of cash flows for the three months ended January 31, 2020. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases remained substantially unchanged. For leases that commenced before the effective date of new accounting standard, we elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. We also elected to exclude leases with a term of 12 months or less in the ROU assets and lease liabilities. The adoption of this standard had no impact on our results of operations, cash flows and retained earnings.

Adoption of the new guidance impacted the condensed consolidated balance sheet as follows:



	October 31, 2019		Impact of Adopting		November 1, 2019
	As Reported		Lease Guidance		As Adopted
	(in millions)
Other assets	$	611	$	192	$	803
Other accrued liabilities	$	440	$	48	$	488
Other long-term liabilities	$	473	$	144	$	617

Other amendments to GAAP in the U.S. that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.