Cummins Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Cover
- Document and Entity Information
Financial Statements
Notes to Financial Statements
Accounting Policies
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Notes Tables
Notes Details

PRODUCT WARRANTY LIABILITY (Details)

v2.4.1.9

PRODUCT WARRANTY LIABILITY (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Product Warranty Liability:
Balance, beginning of year	$ 1,129us-gaap_ProductWarrantyAccrual	$ 1,088us-gaap_ProductWarrantyAccrual
Provision for warranties issued	411	431
Deferred revenue on extended warranty contracts sold	263us-gaap_DeferredRevenueAdditions	189us-gaap_DeferredRevenueAdditions
Payments	(404)us-gaap_ProductWarrantyAccrualPayments	(427)us-gaap_ProductWarrantyAccrualPayments
Amortization of deferred revenue on extended warranty contracts	(148)	(115)
Changes in estimates for pre-existing warranties	41	(35)
Foreign currency translation	(9)	(2)
Balance, end of period	1,283us-gaap_ProductWarrantyAccrual	1,129us-gaap_ProductWarrantyAccrual
Product Warranty Liability
Deferred revenue related to extended coverage programs, Current portion	401us-gaap_DeferredRevenueCurrent	285us-gaap_DeferredRevenueCurrent
Deferred revenue related to extended coverage programs, Noncurrent portion	513us-gaap_DeferredRevenueNoncurrent	414us-gaap_DeferredRevenueNoncurrent
Total deferred revenue related to extended coverage programs	608	494
Total receivables related to estimated supplier recoveries	16cmi_ReceivableForSupplierRecoveries	10cmi_ReceivableForSupplierRecoveries
Long-term portion of warranty liability	312	275
Deferred Revenue
Product Warranty Liability
Deferred revenue related to extended coverage programs, Current portion	170	145
Other liabilities and deferred revenue
Product Warranty Liability
Deferred revenue related to extended coverage programs, Noncurrent portion	438	349
Long-term portion of warranty liability	312	275
Trade and other receivables
Product Warranty Liability
Receivables related to estimated supplier recoveries, Current portion	12	5
Other assets
Product Warranty Liability
Receivables related to estimated supplier recoveries, Long-term portion	$ 4	$ 5

- Definition

The carrying amount of consideration received or receivable related to extended coverage programs, as of the balance sheet date, on potential earnings that were not recognized as revenue in conformity with GAAP.

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Amount of deferred revenue recognized for transactions arising during the current reporting period. Deferred revenue is a liability as of the balance sheet date related to a revenue producing activity for which revenue has not yet been recognized. Generally, an Entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

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Amount of previously reported deferred or unearned revenue that was recognized as revenue during the period. Deferred revenue is a liability related to a revenue producing activity for which revenue has not yet been recognized. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP.

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Represents the aggregate Increase or Decrease in the liability during the reporting period for accruals related to preexisting extended product warranties (including adjustments related to changes in estimates). Does not include any Increase or Decrease in the liability for accruals related to standard product warranties.

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Carrying value as of the balance sheet date of obligations incurred through that date and payable for estimated claims under standard and extended warranty protection rights granted to customers.

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