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Contingent Liabilities, Commitments and Legal Matters | 9 Months Ended
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Apr. 30, 2019
Commitments and Contingencies Disclosure [Abstract] |
Contingent Liabilities, Commitments and Legal Matters |
16. | Contingent Liabilities, Commitments and Legal Matters
The Company’s total commercial commitments under standby repurchase obligations on dealer inventory financing, as discussed in Note 14 to the Consolidated Financial Statements in our fiscal 2018 Form 10-K and now including similar obligations of EHG assumed with that acquisition, were $3,337,543 and $2,748,465 as of April 30, 2019 and July 31, 2018, respectively, with the increase primarily attributable to the acquisition of EHG as discussed in Note 2 to the Condensed Consolidated Financial Statements. The commitment term is generally up to eighteen months. As discussed in the Company’s fiscal 2018 Form 10-K, the Company accounts for the guarantee under repurchase agreements of dealers’ financing by deferring a portion of the related product sale that represents the estimated fair value of the guarantee at inception. This deferred amount is included in the repurchase and guarantee reserve balances of $10,300 and $7,400 as of April 30, 2019 and July 31, 2018, respectively, which increased primarily due to the acquisition of EHG and are included in Other current liabilities in the Condensed Consolidated Balance Sheets. Losses incurred related to repurchase agreements during the three and nine-month periods ended April 30, 2019 and April 30, 2018 were not material. Based on current market conditions, the Company believes that any future losses under these agreements will not have a material effect on the Company’s consolidated financial position, results of operations or cash flows. The Company is also involved in certain litigation arising out of its operations in the normal course of its business, most of which is based upon state “lemon laws,” warranty claims and vehicle accidents (for which the Company carries insurance above a specified self-insured retention or deductible amount). The outcomes of legal proceedings and claims brought against the Company are subject to significant uncertainty. There is significant judgment required in assessing both the probability of an adverse outcome and the determination as to whether an exposure can be reasonably estimated. Based on current conditions, in management’s opinion the ultimate disposition of any current legal proceedings or claims against the Company will not have a material effect on the Company’s financial condition, operating results or cash flows. Litigation is, however, inherently uncertain and an adverse outcome from such litigation could have a material effect on the operating results of a particular reporting period.

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