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Accounting Policies (Tables) | 12 Months Ended
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Dec. 31, 2018
Disaggregated Revenue by Primary Geographical Market, Major Product Line and Timing of Revenue Recognition | The following table provides information about disaggregated revenue by primary geographical market, major product line and timing of revenue recognition.
|  | For the Year Ended December 31, 2018 |
|  | Semiconductor Test |  |  | System Test |  |  | Industrial Automation |  |  | Wireless Test |  |  | Corporate and Other |  |  | Consolidated |
|  | System on a Chip |  |  | Memory |  |  | Defense/ Aerospace |  |  | Storage Test |  |  | Production Board Test |  |  | Universal Robots |  |  | Mobile Industrial Robots |  |  | Energid |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Americas |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Point in time |  | $ | 43,398 |  |  | $ | 14,579 |  |  | $ | 59,246 |  |  | $ | 767 |  |  | $ | 9,082 |  |  | $ | 68,289 |  |  | $ | 7,326 |  |  | $ | 543 |  |  | $ | 17,730 |  |  | $ | (1,205 | ) |  | $ | 219,755 |
Over time |  |  | 35,100 |  |  |  | 2,774 |  |  |  | 24,577 |  |  |  | — |  |  |  | 3,091 |  |  |  | 649 |  |  |  | — |  |  |  | 997 |  |  |  | 1,436 |  |  |  | — |  |  |  | 68,624 |
Europe, Middle East and Africa |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Point in time |  |  | 50,988 |  |  |  | 9,726 |  |  |  | 3,056 |  |  |  | — |  |  |  | 16,733 |  |  |  | 105,776 |  |  |  | 10,839 |  |  |  | — |  |  |  | 3,821 |  |  |  | — |  |  |  | 200,939 |
Over time |  |  | 21,584 |  |  |  | 1,125 |  |  |  | 2,124 |  |  |  | — |  |  |  | 6,467 |  |  |  | 1,000 |  |  |  | — |  |  |  | 1,591 |  |  |  | 1,147 |  |  |  | — |  |  |  | 35,038 |
Asia Pacific |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Point in time |  |  | 916,107 |  |  |  | 235,061 |  |  |  | 2,769 |  |  |  | 58,004 |  |  |  | 17,761 |  |  |  | 57,830 |  |  |  | 5,950 |  |  |  | 10 |  |  |  | 100,985 |  |  |  | — |  |  |  | 1,394,477 |
Over time |  |  | 140,887 |  |  |  | 10,203 |  |  |  | 965 |  |  |  | 7,877 |  |  |  | 3,221 |  |  |  | 551 |  |  |  | — |  |  |  | 101 |  |  |  | 6,127 |  |  |  | — |  |  |  | 169,932 |
Lease revenue |  |  | 10,885 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 392 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 760 |  |  |  | — |  |  |  | 12,037 |
Total |  | $ | 1,218,949 |  |  | $ | 273,468 |  |  | $ | 92,737 |  |  | $ | 66,648 |  |  | $ | 56,747 |  |  | $ | 234,095 |  |  | $ | 24,115 |  |  | $ | 3,242 |  |  | $ | 132,006 |  |  | $ | (1,205 | ) |  | $ | 2,100,802 |
Information about Contract Liabilities | The following table provides information about contract liabilities. Teradyne does not have material contract assets on the balance sheet.
|  | December 31, 2018 |  |  | January 1, 2018 (as adjusted) |  |  | Increase |
|  | (in thousands) |
Deferred revenue and customer advances |  | $ | 77,711 |  |  | $ | 76,638 |  |  | $ | 1,073 |
Long-term deferred revenue and customer advances |  |  | 32,750 |  |  |  | 20,848 |  |  |  | 11,902 |
Deferred Revenue and Customer Advances | As of December 31, 2018 and 2017, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:
|  | 2018 |  |  | 2017 |
|  | (in thousands) |
Maintenance and training |  | $ | 58,362 |  |  | $ | 57,256 |
Extended warranty |  |  | 27,422 |  |  |  | 24,438 |
Customer advances, undelivered elements and other |  |  | 24,677 |  |  |  | 32,047 |
Total deferred revenue and customer advances |  | $ | 110,461 |  |  | $ | 113,741 |
Other Accrued Liabilities | The balance below is included in other accrued liabilities:
|  | Amount |
|  | (in thousands) |
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 |
Acquisition |  |  | 41 |
Accruals for warranties issued during the period |  |  | 13,045 |
Accruals related to pre-existing warranties |  |  | 921 |
Settlements made during the period |  |  | (14,298 | )
Balance at December 31, 2018 |  | $ | 7,909 |
Extended Product Warranty of 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, 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 |
Deferral of new extended warranty revenue |  |  | 23,753 |
Recognition of extended warranty deferred revenue |  |  | (20,769 | )
Balance at December 31, 2018 |  | $ | 27,422 |
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:
|  | 2018 |  |  | 2017 |
|  | (in thousands) |
Contract manufacturer and supplier prepayments |  | $ | 131,642 |  |  | $ | 82,503 |
Prepaid taxes |  |  | 9,646 |  |  |  | 5,039 |
Prepaid maintenance and other services |  |  | 8,487 |  |  |  | 8,189 |
Other prepayments |  |  | 12,744 |  |  |  | 12,386 |
Total prepayments |  | $ | 162,519 |  |  | $ | 108,117 |
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
ASU 2014-09 |
Summarize Impact of ASC 606 to Consolidated Financial Statements | The following tables summarize the impact of ASC 606 to Teradyne’s consolidated financial statements. Differences are the result of timing differences between the recognition of revenue under ASC 606 and ASC 605 primarily with respect to software transactions deferred due to lack of vendor specific objective evidence of price under ASC 605 and Teradyne’s assessment of acceptance under ASC 606. Under Legacy GAAP, Teradyne did not recognize revenue prior to acceptance if payment, title, or risk of loss was tied to acceptance. Under ASC 606, Teradyne recognizes revenue prior to receipt of acceptance if acceptance is deemed a formality. Condensed Consolidated Balance Sheet:
|  | December 31, 2018 |
|  | As Reported |  |  | Adjustments to Recognize under Legacy GAAP |  |  | Legacy GAAP |
|  | (in thousands, except per share amount) |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, less allowance for doubtful accounts |  | $ | 291,267 |  |  | $ | (37,348 | ) |  | $ | 253,919 |
Inventories, net |  |  | 153,541 |  |  |  | 10,759 |  |  |  | 164,300 |
Deferred tax assets |  |  | 70,848 |  |  |  | (3,874 | ) |  |  | 66,974 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deferred revenue and customer advances |  | $ | 77,711 |  |  | $ | (4,118 | ) |  | $ | 73,593 |
Income taxes payable |  |  | 36,185 |  |  |  | (4,495 | ) |  |  | 31,690 |
Long-term deferred revenue and customer advances |  |  | 32,750 |  |  |  | (10,303 | ) |  |  | 22,447 |
Shareholders’ equity |  |  |  |  |  |  |  |  |  |  |  |
Accumulated deficit |  | $ | (158,191 | ) |  | $ | (11,547 | ) |  | $ | (169,738 | )
Condensed Consolidated Stateme nt of Operation:
|  | For the Year Ended December 31, 2018 |
|  | As Reported |  |  | Adjustments to Recognize under Legacy GAAP |  |  | Legacy GAAP |
|  | (in thousands, except per share amount) |
Total revenues |  | $ | 2,100,802 |  |  | $ | (39,184 | ) |  | $ | 2,061,618 |
Total cost of revenues |  |  | 880,408 |  |  |  | (10,760 | ) |  |  | 869,648 |
Income tax provision |  |  | 16,022 |  |  |  | (4,197 | ) |  |  | 11,825 |
Net income |  |  | 451,779 |  |  |  | (24,227 | ) |  |  | 427,552 |
Net income per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 2.41 |  |  | $ | (0.13 | ) |  | $ | 2.28 |
Diluted |  | $ | 2.35 |  |  | $ | (0.13 | ) |  | $ | 2.22 |

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