Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

As of December 31, 2014 and 2013, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:


	2014		2013
	(in thousands)
Extended warranty	$	43,300	$	34,909
Equipment maintenance and training		30,500		22,455
Customer advances		8,875		4,825
Undelivered elements		8,857		6,971

Total deferred revenue and customer advances	$	91,532	$	69,160

Warranty Accrual Included in Other Accrued Liabilities

The balance below is included in other accrued liabilities.


	Amount
	(in thousands)
Balance at December 31, 2011	$	8,153
Accruals for warranties issued during the period		14,704
Accruals related to pre-existing warranties		877
Settlements made during the period		(13,948	)

Balance at December 31, 2012		9,786
Accruals for warranties issued during the period		10,574
Accruals related to pre-existing warranties		(3,534	)
Settlements made during the period		(10,166	)

Balance at December 31, 2013		6,660
Accruals for warranties issued during the period		15,406
Accruals related to pre-existing warranties		(2,008	)
Settlements made during the period		(11,116	)

Balance at December 31, 2014	$	8,942

Extended Product Warranty Included in Short and Long-Term Deferred Revenue and Customer Advances

The balance below is included in short and long-term deferred revenue and customer advances.


	Amount
	(in thousands)
Balance at December 31, 2011	$	14,030
Deferral of new extended warranty revenue		22,704
Recognition of extended warranty deferred revenue		(8,690	)

Balance at December 31, 2012		28,044
Deferral of new extended warranty revenue		20,630
Recognition of extended warranty deferred revenue		(13,765	)

Balance at December 31, 2013		34,909
Deferral of new extended warranty revenue		29,519
Recognition of extended warranty deferred revenue		(21,128	)

Balance at December 31, 2014	$	43,300

Schedule of Prepayments

Prepayments consist of the following and are included in prepayments on the balance sheet:


	2014		2013
	(in thousands)
Contract manufacturer prepayments	$	65,972	$	115,388
Prepaid taxes		11,462		3,281
Prepaid maintenance and other services		7,343		6,538
Other prepayments		11,042		11,167

Total prepayments	$	95,819	$	136,374

Useful Lives of Assets

Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows:


Buildings		40 years
Building improvements		5 to 10 years
Leasehold improvements		Lesser of lease term or 10 years
Furniture and fixtures		10 years
Test systems manufactured internally		6 years
Machinery and equipment		3 to 5 years
Software		3 to 5 years