Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

As of December 31, 2017 and 2016, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:


	2017		2016
	(in thousands)
Maintenance and training	$	57,256	$	46,803
Customer advances, undelivered elements and other		32,047		32,938
Extended warranty		24,438		28,200

Total deferred revenue and customer advances	$	113,741	$	107,941

Warranty Accrual Included in Other Accrued Liabilities

The balance below is included in other accrued liabilities:


	Amount
	(in thousands)
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
Accruals for warranties issued during the period		14,223
Accruals related to pre-existing warranties		(379	)
Settlements made during the period		(12,847	)

Balance at December 31, 2017	$	8,200

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, 2014	$	34,197
Acquisition		870
Deferral of new extended warranty revenue		17,698
Recognition of extended warranty deferred revenue		(22,741	)

Balance at December 31, 2015		30,024
Deferral of new extended warranty revenue		19,909
Recognition of extended warranty deferred revenue		(21,733	)

Balance at December 31, 2016		28,200
Deferral of new extended warranty revenue		20,513
Recognition of extended warranty deferred revenue		(24,275	)

Balance at December 31, 2017	$	24,438

Schedule of Prepayments and Other Current Assets

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


	2017		2016
	(in thousands)
Contract manufacturer and supplier prepayments	$	82,503	$	84,473
Prepaid maintenance and other services		8,189		7,676
Prepaid taxes		5,039		4,664
Other prepayments		12,386		11,641

Total prepayments	$	108,117	$	108,454

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