Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Summary of the effects of the adoption of Topic 606

The following table summarizes the effects of adopting Topic 606 on Cadence’s consolidated balance sheet as of December 29, 2018:

	As reported under Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)
Receivables, net	$	297,082		$	(12,099	)	$	284,983
Prepaid expenses and other	92,550			(10,055		)	82,495
Long-term receivables	5,972			(623		)	5,349
Other assets	371,231			(17,013		)	354,218
Accounts payable and accrued liabilities*	256,526			(17,438		)	239,088
Current portion of deferred revenue	352,456			45,119			397,575
Long-term portion of deferred revenue	48,718			17,637			66,355
Retained earnings	772,709			(86,120		)	686,589
Accumulated other comprehensive loss	(24,780		)	1,012			(23,768		)

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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 consolidated income statement for fiscal 2018:

	As reported under Topic 606		Adjustments			Balances under Prior GAAP
	(In thousands, except per share amounts)
Product and maintenance revenue	$	1,997,887	$	1,031		$	1,998,918
Services revenue	140,135		6,643			146,778
Cost of product and maintenance	173,011		571			173,582
Marketing and sales expense	439,669		3,947			443,616
Provision for income taxes	30,613		(2,364		)	28,249
Net income	345,777		5,520			351,297
Net income per share - basic	1.26		0.02			1.28
Net income per share - diluted	1.23		0.02			1.25

Cadence’s net cash provided by operating activities for fiscal 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 consolidated statement of cash flows for fiscal 2018:

	As reported under Topic 606			Adjustments			Balances under Prior GAAP
	(In thousands)
Net income	$	345,777		$	5,520		$	351,297
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(11,676		)	(2,213		)	(13,889		)
Changes in operating assets and liabilities:
Receivables	(87,083		)	(28,226		)	(115,309		)
Prepaid expenses and other	(19,622		)	5,968			(13,654		)
Other assets	(16,077		)	3,461			(12,616		)
Accounts payable and accrued liabilities	1,553			10,100			11,653
Deferred revenue	100,696			5,390			106,086

Schedule of the cumulative effect adjustments to 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	345,777
Balance, December 29, 2018	$	772,709

Depreciation and amortization over the estimated useful lives, using the straight-line method

Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows:

Computer equipment and related software	2-7 years
Buildings	25-32 years
Leasehold improvements	Shorter of the lease term or the estimated useful life
Building improvements and land improvements	Estimated useful life up to 32 years
Furniture and fixtures	3-5 years
Equipment	3-5 years