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Warranties
12 Months Ended
Sep. 30, 2020
Product Warranties Disclosures [Abstract]  
Warranties

15.    Warranties

The Company’s products generally carry explicit warranties that extend from six months to five years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include manufacturers’ warranties. These manufacturers’ warranties are generally passed on to the end customer of the Company’s products, and the customer would generally deal directly with the component manufacturer. Warranty costs recorded were $57.9 million, $54.9 million and $57.0 million in fiscal 2020, 2019 and 2018, respectively.

Provisions for estimated warranty and other related costs are recorded at the time of sale and are periodically adjusted to reflect actual experience. Certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. At times, warranty issues arise that are beyond the scope of the Company’s historical experience. It is reasonably possible that additional warranty and other related claims could arise from disputes or other matters in excess of amounts accrued; however, the Company does not expect that any such amounts, while not determinable, would have a material effect on the Company’s consolidated financial condition, results of operations or cash flows.

Changes in the Company’s assurance-type warranty liability were as follows (in millions):

 

 

Fiscal Year Ended September 30,

 

 

 

2020

 

 

2019

 

Balance at beginning of year

 

$

65.1

 

 

$

75.3

 

Adoption of ASC 606

 

 

 

 

 

(14.4

)

Warranty provisions

 

 

43.1

 

 

 

55.5

 

Settlements made

 

 

(55.9

)

 

 

(50.2

)

Changes in liability for pre-existing warranties, net

 

 

14.8

 

 

 

(0.8

)

Foreign currency translation

 

 

0.3

 

 

 

(0.3

)

Balance at end of year

 

$

67.4

 

 

$

65.1

 

Changes in the liability for pre-existing warranties in fiscal 2020 of $12.3 million within the Defense segment primarily relate to additional warranty costs on the Joint Light Tactical Vehicle (JLTV) program. Due to the adoption of ASC 606, the Company determined that certain warranties previously classified as assurance-type warranties are service-type warranties. The liabilities associated with service-type warranties are disclosed in Note 3 of the Notes to Consolidated Financial Statements.