ACCOUNTING POLICIES (Tables)

62 Months Ended

Dec. 31, 2012

Deferred Revenue and Customer Advances

As of December 31, 2012 and 2011, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:

	2012		2011
	(in thousands)
Customer advances	$	39,613	$	70,001
Maintenance, training and extended warranty		51,198		33,953
Undelivered elements		6,773		7,939
Acceptance		—		318
Total deferred revenue and customer advances	$	97,584	$	112,211

Other Accrued Liabilities

The balance below is included in other accrued liabilities.

	Amount
	(in thousands)
Balance at December 31, 2009	$	6,435
Accruals for warranties issued during the period		17,084
Accruals related to pre-existing warranties		(1,338	)
Settlements made during the period		(12,295	)
Balance at December 31, 2010		9,886
Acquisition		327
Accruals for warranties issued during the period		13,167
Accruals related to pre-existing warranties		(2,689	)
Settlements made during the period		(12,538	)
Balance at December 31, 2011		8,153
Accruals for warranties issued during the period		14,704
Accruals related to pre-existing warranties		877
Settlements made during the period		(13,948	)
Balance at December 31, 2012	$	9,786

Extended Product Warranty of Short and Long-Term Deferred Revenue and Customer Advances

The balance below is included in short and long-term deferred revenue and customer advances.

	Amount
	(in thousands)
Balance at December 31, 2009	$	4,462
Deferral of new extended warranty revenue		7,696
Recognition of extended warranty deferred revenue		(3,186	)
Balance at December 31, 2010		8,972
Acquisition		3,151
Deferral of new extended warranty revenue		8,659
Recognition of extended warranty deferred revenue		(8,040	)
Balance at December 31, 2011		12,742
Deferral of new extended warranty revenue		22,344
Recognition of extended warranty deferred revenue		(8,099	)
Balance at December 31, 2012	$	26,987

Property, Plant And Equipment

Teradyne provides for depreciation of its assets principally on the straight-line method with the cost of the assets being charged to expense over their useful lives as follows:

Buildings	40 years
Building improvements	5 to 10 years
Leasehold improvements	Lesser of lease term or useful life
Furniture and fixtures	10 years
Test systems manufactured internally	6 years
Machinery and equipment	3 to 5 years
Software	3 to 5 years

Effect to Income (Loss) from Continuing Operations for Recording Stock-Based Compensation

The effect to income from continuing operations for recording stock-based compensation for the years ended December 31 was as follows:

	2012			2011			2010
	(in thousands)
Cost of revenue	$	6,604		$	7,097		$	6,536
Engineering and development		13,589			10,001			9,209
Selling and administrative		19,727			15,239			14,032
Stock-based compensation		39,920			32,337			29,777
Income tax benefit		(9,548	)		(8,509	)		—
Total stock-based compensation expense after income taxes	$	30,372		$	23,828		$	29,777