Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Deferred Revenue and Customer Advances

As of December 31, 2019 and 2018, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:

	2019		2018
	(in thousands)
Maintenance, service and training	$	63,815	$	58,362
Extended warranty		30,677		27,422
Customer advances, undelivered elements and other		56,358		24,677
Total deferred revenue and customer advances	$	150,850	$	110,461

Other Accrued Liabilities

The balance below is included in other accrued liabilities:

	Amount
	(in thousands)
Balance at December 31, 2016	$	7,203
Accruals for warranties issued during the period		14,223
Accruals related to pre-existing warranties		(379	)
Settlements made during the period		(12,847	)
Balance at December 31, 2017		8,200
Acquisition		41
Accruals for warranties issued during the period		13,045
Accruals related to pre-existing warranties		921
Settlements made during the period		(14,298	)
Balance at December 31, 2018		7,909
Acquisition		14
Accruals for warranties issued during the period		14,106
Accruals related to pre-existing warranties		4,026
Settlements made during the period		(17,059	)
Balance at December 31, 2019	$	8,996

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, 2016	$	28,200
Deferral of new extended warranty revenue		20,513
Recognition of extended warranty deferred revenue		(24,275	)
Balance at December 31, 2017		24,438
Deferral of new extended warranty revenue		23,753
Recognition of extended warranty deferred revenue		(20,769	)
Balance at December 31, 2018		27,422
Deferral of new extended warranty revenue		23,271
Recognition of extended warranty deferred revenue		(20,016	)
Balance at December 31, 2019	$	30,677

Schedule of Prepayments and Other Current Assets

Prepayments consist of the following and are included in prepayments and other current assets on the balance sheet:

	2019		2018
	(in thousands)
Contract manufacturer and supplier prepayments	$	143,392	$	131,642
Prepaid taxes		8,046		9,646
Prepaid maintenance and other services		8,503		8,487
Other prepayments		16,753		12,744
Total prepayments	$	176,694	$	162,519

Useful Lives of Assets

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 10 years
Furniture and fixtures	10 years
Test systems manufactured internally	6 years
Machinery, equipment and software	3 to 5 years