Basis of Presentation and Summary of Significant Accounting Policies New Accounting Standards (Tables)

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of the effects of the adoption of Topic 606

The following table summarizes the effects of adopting Topic 606 on Cadence’s condensed consolidated balance sheet as of June 30, 2018:

	As reported under Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)
Receivables, net	$	219,072		$	(19,328	)	$	199,744
Prepaid expenses and other	56,042			(7,597		)	48,445
Long-term receivables	4,740			1,073			5,813
Other assets	227,173			(11,766		)	215,407
Accounts payable and accrued liabilities*	243,158			(26,920		)	216,238
Current portion of deferred revenue	327,078			57,720			384,798
Long-term portion of deferred revenue	46,912			16,009			62,921
Retained earnings	574,966			(83,068		)	491,898
Accumulated other comprehensive loss	(13,172		)	(1,359		)	(14,531		)

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* Cadence has certain arrangements under which consideration is received from customers prior to identifying the specific goods or services to be delivered under the contract. Cadence records an accrued liability on a contract-by-contract basis at the end of each reporting period for cash consideration received.

The following table summarizes the effects of adopting Topic 606 on Cadence’s condensed consolidated income statement for the three months ended June 30, 2018:

	As reported under Topic 606		Adjustments			Balances under Prior GAAP
	(In thousands, except per share amounts)
Product and maintenance revenue	$	487,870	$	(4,616	)	$	483,254
Services revenue	30,521		1,336			31,857
Cost of product and maintenance	40,127		114			40,241
Marketing and sales expense	109,300		(1,166		)	108,134
Provision for income taxes	14,876		(151		)	14,725
Net income	75,149		(2,077		)	73,072
Net income per share - basic	0.27		—			0.27
Net income per share - diluted	0.27		(0.01		)	0.26

The following table summarizes the effects of adopting Topic 606 on Cadence’s condensed consolidated income statement for the six months ended June 30, 2018:

	As reported under Topic 606		Adjustments			Balances under Prior GAAP
	(In thousands, except per share amounts)
Product and maintenance revenue	$	968,479	$	1,564		$	970,043
Services revenue	67,225		3,300			70,525
Cost of product and maintenance	81,857		(137		)	81,720
Marketing and sales expense	218,448		(3,976		)	214,472
Provision for income taxes	20,160		406			20,566
Net income	148,034		8,571			156,605
Net income per share - basic	0.54		0.03			0.57
Net income per share - diluted	0.53		0.03			0.56

Cadence’s net cash provided by operating activities for the six months ended June 30, 2018 did not change due to the adoption of Topic 606. The following table summarizes the effects of adopting Topic 606 on the financial statement line items of Cadence’s condensed consolidated statement of cash flows for the six months ended June 30, 2018:

	As reported under Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)
Net income	$	148,034		$	8,571		$	156,605
Changes in operating assets and liabilities:
Receivables	(2,606		)	(27,473		)	(30,079		)
Prepaid expenses and other	13,294			4,446			17,740
Other assets	5,622			(3,214		)	2,408
Accounts payable and accrued liabilities	(11,832		)	1,307			(10,525		)
Deferred revenue	71,667			16,363			88,030

Schedule of the cumulative effect of the change on retained earnings

The following table presents the cumulative effect adjustments, net of income tax effects, to beginning retained earnings for new accounting standards adopted by Cadence on the first day of fiscal 2018:

	Retained Earnings
	(In thousands)
Balance, December 30, 2017, as previously reported	$	341,003
Cumulative effect adjustment from the adoption of new accounting standards:
Revenue from Contracts with Customers (Topic 606)	91,640
Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	2,638
Income taxes (Topic 740): Intra-entity Transfers of Assets Other Than Inventory	(8,349		)
Balance, December 30, 2017, as adjusted	426,932
Net Income	148,034
Balance, June 30, 2018	$	574,966