2)	Basis of Presentation

The consolidated financial statements include the accounts of MKS Instruments, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition and allowance for doubtful accounts, inventory valuation, warranty costs, stock-based compensation, intangible assets, goodwill, other long-lived assets, in process research and development and other acquisition expenses and income taxes. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Reclassification of certain line items in prior period financial statements

The Company has historically recorded the revenue and related cost of revenue for the sale of its spare parts within Products in its Statements of Operations for the Vacuum & Analysis segment. The Company has now determined that these items are better presented within revenue and related cost of revenue within Services for the Vacuum & Analysis segment in its Statements of Operations to align with the current manner in which the Company operates it service business, and has elected to reclassify these amounts in previously issued financial statements as shown below. This change in presentation has no impact on total revenue or total cost of revenue.


	Twelve Months Ended December 31, 2017
	As previously reported		Adjustment			As revised
Net revenues:
Products	$	1,723,433	$	(22,132	)	$	1,701,301
Services		192,544		22,132			214,676

Total net revenues		1,915,977		—			1,915,977

Cost of revenues:
Cost of products		901,546		4,823			906,369
Cost of services		122,980		(4,823	)		118,157

Total cost of revenues	$	1,024,526	$	—		$	1,024,526


	Twelve Months Ended December 31, 2016
	As previously reported		Adjustment			As revised
Net revenues:
Products	$	1,134,013	$	(15,434	)	$	1,118,579
Services		161,329		15,434			176,763

Total net revenues		1,295,342		—			1,295,342

Cost of revenues:
Cost of products		627,850		2,358			630,208
Cost of services		101,873		(2,358	)		99,515

Total cost of revenues	$	729,723	$	—		$	729,723