Summary of Significant Accounting Policies (Tables)

3 Months Ended

Jan. 31, 2014

Schedule of Accrued Product Warranty and Deferred Warranty Revenue

The following table presents accrued product warranty and deferred warranty revenue activity:



	Three Months Ended January 31,
(in millions)	2014			2013
Balance at beginning of period	$	1,349		$	1,118
Costs accrued and revenues deferred	71			111
Currency translation adjustment	(2		)	—
Adjustments to pre-existing warranties^(A)(B)	52			40
Payments and revenues recognized	(132		)	(161		)
Balance at end of period	1,338			1,108
Less: Current portion	602			559
Noncurrent accrued product warranty and deferred warranty revenue	$	736		$	549

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(A)

Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. Our warranty liability is generally affected by component failure rates, repair costs, and the timing of failures. Future events and circumstances related to these factors could materially change our estimates and require adjustments to our liability. In addition, new product launches require a greater use of judgment in developing estimates until historical experience becomes available.

In the first quarter of 2014, we recorded adjustments for changes in estimates of $52 million or $0.64 per diluted share. In the first quarter of 2013, we recorded adjustments for changes in estimates of $40 million or $0.50 per diluted share. The impact of income taxes on the 2014 and 2013 adjustments is not material due to our deferred tax valuation allowances on our U.S. deferred tax assets

(B)

In the first quarter of 2013, we recognized $13 million of charges for adjustments to pre-existing warranties for a specific warranty issue related to component parts from a supplier. Also during the first quarter of 2013, we reached agreement for reimbursement from this supplier for this amount and other costs previously accrued. As a result of this agreement, we recognized a recovery of $27 million within Costs of products sold and recorded a receivable within Other current assets.