Accrued Expenses

12 Months Ended

Oct. 31, 2023

Accrued expenses at October 31, 2023 and 2022, consisted of the following (amounts in thousands):


	2023		2022
Land, land development and construction	$	555,146	$	334,975
Compensation and employee benefits	212,684		223,609
Escrow liability associated with our wholly owned captive title company	42,451		44,115
Self-insurance	230,688		251,576
Warranty	206,171		164,409
Lease liabilities	123,866		139,664
Deferred income	52,907		50,973
Interest	30,044		31,988
Commitments to unconsolidated entities	29,212		26,905
Other	65,612		77,773
	$	1,548,781	$	1,345,987

At the time each home is closed and title and possession are transferred to the home buyer, we record an initial accrual for expected warranty costs on that home. Our initial accrual for expected warranty costs is based upon historical warranty claim experience. Adjustments to our warranty liabilities related to homes delivered in prior periods are recorded in the period in which a change in our estimate occurs. The table below provides a reconciliation of the changes in our warranty accrual during fiscal 2023, 2022, and 2021 (amounts in thousands):


	2023		2022		2021
Balance, beginning of year	$	164,409	$	145,062	$	157,351
Additions - homes closed during the year	44,949		42,423		42,316
Addition - liabilities assumed in an asset acquisition	—		150		100
Increase in accruals for homes closed in prior years - net	12,739		10,433		9,155
Increase in accruals expected to be recovered from third parties (1)	58,000		29,000		—
Reclassification from self-insurance accruals	696		—		3,618

Decrease to water intrusion accrual	—		—		(11,823)
Charges incurred	(74,622)		(62,659)		(55,655)
Balance, end of year	$	206,171	$	164,409	$	145,062

(1) These increases in accruals for warranty charges are expected to be recovered from our insurance carriers or suppliers, which are recorded as receivables included in “Receivables, prepaid expenses, and other assets” on our Consolidated Balance Sheets.

Since fiscal 2014, we have received water intrusion claims from owners of homes built since 2002 in communities located in Pennsylvania and Delaware (which are in our North region). Our recorded remaining estimated repair costs, which reflects a reduction for the aggregate amount expended to resolve claims, were approximately $41.1 million at October 31, 2023 and $46.9 million at October 31, 2022. We continue to perform review procedures to assess, among other things, the number of affected homes, whether repairs are likely to be required, and the extent of such repairs.

Our review process, conducted quarterly, includes an analysis of many factors to determine whether a claim is likely to be received and the estimated costs to resolve any such claim, including: the closing dates of the homes; the number of claims received; our inspection of homes; an estimate of the number of homes we expect to repair; the type and cost of repairs that have been performed in each community; the estimated costs to remediate pending and future claims; the expected recovery from our insurance carriers and suppliers; and the previously recorded amounts related to these claims. We also monitor legal developments relating to these types of claims and review the volume, relative merits and adjudication of claims in litigation or arbitration. Our review process includes a number of estimates that are based on assumptions with uncertain outcomes. Due to the degree of judgment required in making these estimates and the inherent uncertainty in potential outcomes, it is reasonably possible that our actual costs and recoveries could differ from those recorded