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Summary of Significant Accounting Policies (Tables)
6 Months Ended
Apr. 30, 2017
Product Warranty Liability [Line Items]  
Schedule of Product Warranty Liability [Table Text Block]
The following table presents accrued product warranty and deferred warranty revenue activity:
 
Six Months Ended April 30,
(in millions)
2017
 
2016
Balance at beginning of period
$
818

 
$
994

Costs accrued and revenues deferred(A)
87

 
94

Currency translation adjustment
(1
)
 
1

Adjustments to pre-existing warranties(B)
(10
)
 
51

Payments and revenues recognized(A)
(206
)
 
(233
)
Balance at end of period
688

 
907

Less: Current portion
352

 
429

Noncurrent accrued product warranty and deferred warranty revenue
$
336

 
$
478

_________________________
(A)
During the third quarter of 2016, we determined that the amortization of loss reserves for Big Bore extended service contracts, which were included within Costs accrued and revenues deferred, should be applied to Payments and revenues recognized. As a result, for the six months ended April 30, 2016, we have reclassified $25 million of amortization of loss reserves in order to conform to our current presentation. The reclassification did not impact our Consolidated Statements of Operations or our Consolidated Balance Sheets.
(B)
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 second quarter of 2016, we recorded a charge for adjustments to pre-existing warranties of $46 million or $0.56 per diluted share. The pre-existing charges primarily related to increases in both claim frequency and cost of repair across both the Medium Duty and Big Bore engine families. These charges increase the reserve for Navistar's standard warranty obligations as well as the loss positions related to our Big Bore extended service contract.