Product Warranty

6 Months Ended

Jul. 04, 2021

Product Warranties Disclosures [Abstract]

K. 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
	July 4, 2021			June 28, 2020			July 4, 2021			June 28, 2020
	(in thousands)
Balance at beginning of period	$	23,893		$	10,971		$	16,633		$	8,996
Accruals for warranties issued during the period		10,197			6,200			22,078			11,267
Accruals related to pre-existing warranties		(3,450	)		356			(3,003	)		1,412
Settlements made during the period		(4,964	)		(4,511	)		(10,032	)		(8,659	)

Balance at end of period	$	25,676		$	13,016		$	25,676		$	13,016

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
	July 4, 2021			June 28, 2020			July 4, 2021			June 28, 2020
	(in thousands)
Balance at beginning of period	$	53,908		$	33,503		$	51,929		$	30,677
Deferral of new extended warranty revenue		16,290			11,450			23,805			19,050
Recognition of extended warranty deferred revenue		(6,673	)		(4,775	)		(12,209	)		(9,549	)

Balance at end of period	$	63,525		$	40,178		$	63,525		$	40,178