Product Warranty

6 Months Ended

Jun. 28, 2020

J. PRODUCT WARRANTY

Teradyne generally provides a

one-year

warranty on its products, commencing upon installation, acceptance or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The balance below is included in other accrued liabilities.


	For the Three Months Ended						For the Six Months Ended
	June 28, 2020			June 30, 2019			June 28, 2020			June 30, 2019
	(in thousands)
Balance at beginning of period	$	10,971		$	7,752		$	8,996		$	7,909
Accruals for warranties issued during the period		6,200			2,295			11,267			5,360
Accruals related to pre-existing warranties		356			694			1,412			2,024
Settlements made during the period		(4,511	)		(2,608	)		(8,659	)		(7,174	)
Acquisition		—			—			—			14

Balance at end of period	$	13,016		$	8,133		$	13,016		$	8,133

When Teradyne receives revenue for extended warranties, beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The balance below is included in short and long-term deferred revenue and customer advances.


	For the Three Months Ended						For the Six Months Ended
	June 28, 2020			June 30, 2019			June 28, 2020			June 30, 2019
	(in thousands)
Balance at beginning of period	$	33,503		$	27,242		$	30,677		$	27,422
Deferral of new extended warranty revenue		11,450			5,476			19,050			11,296
Recognition of extended warranty deferred revenue		(4,775	)		(4,002	)		(9,549	)		(10,002	)

Balance at end of period	$	40,178		$	28,716		$	40,178		$	28,716