Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

As of December 31, 2016 and 2015, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:


	2016		2015
	(in thousands)
Extended warranty	$	46,753	$	46,499
Equipment maintenance and training		39,037		30,616
Customer advances, undelivered elements and other		22,151		34,157

Total deferred revenue and customer advances	$	107,941	$	111,272

Warranty Accrual Included in Other Accrued Liabilities

The balance below is included in other accrued liabilities:


	Amount
	(in thousands)
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
Accruals for warranties issued during the period		14,291
Accruals related to pre-existing warranties		(1,354	)
Settlements made during the period		(12,659	)

Balance at December 31, 2016	$	7,203

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, 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
Deferral of new extended warranty revenue		27,182
Recognition of extended warranty deferred revenue		(26,928	)

Balance at December 31, 2016	$	46,753

Schedule of Prepayments

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


	2016		2015
	(in thousands)
Contract manufacturer prepayments	$	77,017	$	66,283
Prepaid maintenance and other services		7,676		8,481
Prepaid taxes		4,664		3,781
Other prepayments		19,097		12,974

Total prepayments	$	108,454	$	91,519

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