Summary of Significant Accounting Policies and New Accounting Standards	9 Months Ended
Jul. 30, 2023
Summary of Significant Accounting Policies and New Accounting Standards
Summary of Significant Accounting Policies and New Accounting Standards	(2) Summary of Significant Accounting Policies and New Accounting Standards In the second quarter of 2023, the Company corrected its accounting policy for financing incentives offered to John Deere dealers, as described below. Financing Incentives The Company provides incentive funds to John Deere dealers that meet certain performance metrics, which include minimum finance volume and finance market share with the Company over a defined period. At the end of the qualification period, dealers are granted incentive funds, which can be used for certain predefined uses, including interest rate reductions on future loan and lease originations. In addition, certain dealers may elect to receive cash for a portion of their earned funds. The Company accrues for the incentive costs over the qualification period, which are reported as administrative and operating expenses in the consolidated income statements and accounts payable and accrued expenses in the consolidated balance sheets. The accrued liability is released as dealers utilize the funds. Under the previous accounting treatment, the Company amortized the non-cash portion of the incentive program costs as a reduction to finance income or lease revenue after the dealers designated the use of the incentive award. Quarterly Financial Statements The Company has prepared its interim consolidated financial statements, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. Use of Estimates in Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. New Accounting Standards The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. ASUs adopted in 2023 did not have a material impact on the Company’s financial statements. In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which will be effective in the first quarter of fiscal year 2024. The ASU eliminates the accounting guidance for troubled debt restructurings, enhances disclosures for certain receivable modifications related to borrowers experiencing financial difficulty, and requires disclosure of current period gross write-offs by year of origination. ASU No. 2022-02 and other ASUs to be adopted in future periods are being evaluated and at this point are not expected to have a material impact on the Company’s financial statements.

Summary of Significant Accounting Policies and New Accounting Standards

9 Months Ended

Jul. 30, 2023

Summary of Significant Accounting Policies and New Accounting Standards

Summary of Significant Accounting Policies and New Accounting Standards

(2) Summary of Significant Accounting Policies and New Accounting Standards

In the second quarter of 2023, the Company corrected its accounting policy for financing incentives offered to John Deere dealers, as described below.

Financing Incentives

The Company provides incentive funds to John Deere dealers that meet certain performance metrics, which include minimum finance volume and finance market share with the Company over a defined period. At the end of the qualification period, dealers are granted incentive funds, which can be used for certain predefined uses, including interest rate reductions on future loan and lease originations. In addition, certain dealers may elect to receive cash for a portion of their earned funds. The Company accrues for the incentive costs over the qualification period, which are reported as administrative and operating expenses in the consolidated income statements and accounts payable and accrued expenses in the consolidated balance sheets. The accrued liability is released as dealers utilize the funds.

Under the previous accounting treatment, the Company amortized the non-cash portion of the incentive program costs as a reduction to finance income or lease revenue after the dealers designated the use of the incentive award.

Quarterly Financial Statements

The Company has prepared its interim consolidated financial statements, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted as permitted by such rules and regulations. All normal recurring adjustments have been included. Management believes the disclosures are adequate to present fairly the financial position, results of operations, and cash flows at the dates and for the periods presented. It is suggested these interim consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto appearing in the Company’s latest Annual Report on Form 10-K. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year.

Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates.

New Accounting Standards

The Company closely monitors all Accounting Standard Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) and other authoritative guidance. ASUs adopted in 2023 did not have a material impact on the Company’s financial statements.

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which will be effective in the first quarter of fiscal year 2024. The ASU eliminates the accounting guidance for troubled debt restructurings, enhances disclosures for certain receivable modifications related to borrowers experiencing financial difficulty, and requires disclosure of current period gross write-offs by year of origination. ASU No. 2022-02 and other ASUs to be adopted in future periods are being evaluated and at this point are not expected to have a material impact on the Company’s financial statements.