Summary of Significant Accounting Policies (Tables)

6 Months Ended

Apr. 30, 2021

Accounting Policies [Abstract]

Schedule of Product Warranty and Deferred Warranty Revenue

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

	Six Months Ended April 30,
(in millions)	2021		2020
Balance at beginning of period	$	449	$	510
Costs accrued and revenues deferred	78		73
Adjustments to pre-existing warranties(A)	80		17
Payments and revenues recognized	(135)		(132)
Balance at end of period	472		468
Less: Current portion	237		215
Noncurrent accrued product warranty and deferred warranty revenue	$	235	$	253

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(A) Adjustments to pre-existing warranties reflect changes in our estimate of warranty costs for products sold in prior fiscal periods. Such adjustments typically occur when claims experience deviates from historic and expected trends. In the first six months of 2021, we had higher adjustments to pre-existing warranties as compared to the first six months of 2020, primarily driven by increases from standard warranties as well as proactive campaign actions related to components on prior model year engines, and unfavorable costs related to standard Truck warranties. 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.

Schedule of Balance Sheet Adjustments for Adoption of New Credit Loss Standard

The cumulative effects of the adjustment made to our November 1, 2020 Consolidated Balance Sheet for the adoption of the new credit loss standard were as follows:

(in millions)	Balance at October 31, 2020		Change Due to New Standard		Balance at November 1, 2020
ASSETS
Current assets
Finance receivables, net	$	1,371	$	(3)	$	1,368
Total current assets	4,577		(3)		4,574
Finance receivables, net	251		(4)		247
Trade and other receivables, net	7		(1)		6
Deferred taxes, net	117		2		119
Total assets	$	6,637	$	(6)	$	6,631
LIABILITIES and STOCKHOLDERS' DEFICIT
Liabilities
Current liabilities
Other current liabilities	$	1,453	$	1	$	1,454
Total current liabilities	3,371		1		3,372
Total liabilities	10,459		1		10,460
Stockholders' deficit
Total stockholders' deficit attributable to Navistar International Corporation	(3,826)		(7)		(3,833)
Total liabilities and stockholders' deficit	$	6,637	$	(6)	$	6,631