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Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2020
Deferred Revenue and Customer Advances
As of December 31, 2020 and 2019, deferred revenue and customer advances consisted of the following and are included in the short and long-term deferred revenue and customer advances:
 
 
  
2020
 
  
2019
 
 
  
(in thousands)
 
Maintenance, service and training
  
$
77,654
 
  
$
63,815
 
Customer advances, undelivered elements and other
  
 
63,438
 
  
 
56,358
 
Extended warranty
  
 
51,929
 
  
 
30,677
 
    
 
 
    
 
 
 
Total deferred revenue and customer advances
  
$
193,021
 
  
$
150,850
 
    
 
 
    
 
 
 
Other Accrued Liabilities The balance below is included in other accrued liabilities:
 
  
Amount
 
 
  
(in thousands)
 
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
 
Accruals for warranties issued during the period
  
 
28,490
 
Accruals related to pre-existing warranties
  
 
821
 
Settlements made during the period
  
 
(21,674
    
 
 
 
Balance at December 31, 2020
  
$
16,633
 
    
 
 
 
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, 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
 
Deferral of new extended warranty revenue
  
 
41,694
 
Recognition of extended warranty deferred revenue
  
 
(20,442
    
 
 
 
Balance at December 31, 2020
  
$
51,929
 
    
 
 
 
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:
 
 
  
2020
 
  
2019
 
 
  
(in thousands)
 
Contract manufacturer and supplier prepayments
  
$
212,286
 
  
$
143,392
 
Prepaid taxes
  
 
9,361
 
  
 
8,046
 
Prepaid maintenance and other services
  
 
13,116
 
  
 
8,503
 
Other prepayments
  
 
15,329
 
  
 
16,753
 
    
 
 
    
 
 
 
Total prepayments
  
$
250,092
 
  
$
176,694
 
    
 
 
    
 
 
 
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