Product Warranty

6 Months Ended

Jul. 03, 2022

Product Warranties Disclosures [Abstract]

J. PRODUCT WARRANTY

Teradyne generally provides a

one-year

warranty on its products, commencing upon installation, acceptance or shipment. A provision is recorded upon revenue recognition to cost of revenues for estimated warranty expense based on historical experience. Related costs are charged to the warranty accrual as incurred. The balance below is included in other accrued liabilities.


	For the Three Months Ended						For the Six Months Ended
	July 3,			July 4,			July 3,			July 4,
	2022			2021			2022			2021

	(in thousands)
Balance at beginning of period	$	20,105		$	23,893		$	24,577		$	16,633
Accruals for warranties issued during the period		6,429			10,197			10,530			22,078
Accruals related to pre-existing warranties		(1,611	)		(3,450	)		(4,370	)		(3,003	)
Settlements made during the period		(8,887	)		(4,964	)		(14,701	)		(10,032	)

Balance at end of period	$	16,036		$	25,676		$	16,036		$	25,676

When Teradyne receives revenue for extended warranties, beyond one year, it is deferred and recognized on a straight-line basis over the contract period. Related costs are expensed as incurred. The balance below is included in short and long-term deferred revenue and customer advances.


	For the Three Months Ended						For the Six Months Ended
	July 3,			July 4,			July 3,			July 4,
	2022			2021			2022			2021

	(in thousands)
Balance at beginning of period	$	65,726		$	53,908		$	64,168		$	51,929
Deferral of new extended warranty revenue		9,788			16,290			21,563			23,805
Recognition of extended warranty deferred revenue		(9,723	)		(6,673	)		(19,940	)		(12,209	)

Balance at end of period	$	65,791		$	63,525		$	65,791		$	63,525