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Note 6 - Warranty Costs | 3 Months Ended
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Jan. 31, 2024
Warranty Costs |
Warranty Costs |
6. | Warranty Costs
We accrue for warranty costs that are covered under our existing general liability and construction defect policy as part of our general liability insurance deductible. For homes to be delivered in fiscal 2024, our deductible under our general liability insurance is $30.0 million, aggregated for construction defect and warranty claims, and for homes previously delivered in 2023, our deductible under our general liability insurance was $25.0 million, aggregated for construction defect, warranty, and bodily injury claims. As of November 1, 2023, we no longer have an aggregate deductible for bodily injury claims. For bodily injury claims, our deductible per occurrence in fiscal 2024 is $0.25 million and $0.5 million for action over claims, both with a $30.0 million limit, and for fiscal 2023 it was $0.25 million for all other states and $0.5 million for California, both with a $5.0 million limit. In addition, we establish a warranty accrual for lower cost-related issues to cover home repairs, community amenities and land development infrastructure that are not covered under our general liability and construction defect policy. We accrue an estimate for these warranty costs at the time each home is closed and control is transferred to the homebuyer. Additions, charges and changes in the warranty reserve and general liability reserve for the three months ended January 31, 2024 and 2023 were as follows:
|  | Three Months Ended |
|  | January 31, |
(In thousands) |  | 2024 |  |  | 2023 |
Balance, beginning of period |  | $ | 98,919 |  |  | $ | 97,718 |
Additions – Selling, general and administrative |  |  | 2,547 |  |  |  | 1,577 |
Additions – Cost of sales |  |  | 2,868 |  |  |  | 1,303 |
Charges incurred during the period |  |  | (6,644 | ) |  |  | (8,802 | )
Changes to pre-existing reserves |  |  | 2,146 |  |  |  | (729 | )
Balance, end of period |  | $ | 99,836 |  |  | $ | 91,067 |

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- Definition The entire disclosure for standard and extended product warranties and other product guarantee contracts, including a tabular reconciliation of the changes in the guarantor's aggregate product warranty liability for the reporting period. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(4) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(5) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482425/460-10-50-4 + Details
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