Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

As of December 31, 2015 and 2014, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:


	2015		2014
	(in thousands)
Extended warranty	$	46,499	$	43,300
Equipment maintenance and training		30,616		30,500
Customer advances		17,456		8,875
Undelivered elements and other		16,701		8,857

Total deferred revenue and customer advances	$	111,272	$	91,532

Warranty Accrual Included in Other Accrued Liabilities

The balance below is included in other accrued liabilities:


	Amount
	(in thousands)
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
Acquisition		409
Accruals for warranties issued during the period		11,539
Accruals related to pre-existing warranties		(3,159	)
Settlements made during the period		(10,806	)

Balance at December 31, 2015	$	6,925

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, 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
Acquisition		870
Deferral of new extended warranty revenue		28,549
Recognition of extended warranty deferred revenue		(26,220	)

Balance at December 31, 2015	$	46,499

Schedule of Prepayments

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


	2015		2014
	(in thousands)
Contract manufacturer prepayments	$	66,283	$	65,972
Prepaid maintenance and other services		8,481		7,343
Prepaid taxes		3,781		11,462
Other prepayments		12,974		11,042

Total prepayments	$	91,519	$	95,819

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