Autodesk 2000 Annual Report Download - page 36

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Autodesk, Inc. FY 00
Principles of Consolidation
The accompanying consolidated financial statements
include the accounts of Autodesk and its subsidiaries.
All significant intercompany accounts and trans-
actions have been eliminated.Certain reclassifications
have been made to the fiscal 1999 and 1998 consoli-
dated financial statements to conform to the fiscal
2000 presentation.
Use of Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the amounts reported in Autodesk’s consoli-
dated financial statements and notes thereto. Actual
results could differ materially from those estimates.
Foreign Currency Translation
The assets and liabilities of foreign subsidiaries are
translated from their respective functional currencies
into U.S. dollars at the rates in effect at the balance
sheet date, and revenue and expense amounts are
translated at weighted average rates during the period.
Foreign currency translation adjustments are reflected
as a separate component of stockholders’equity.Gains
and losses resulting from foreign currency transac-
tions are included in interest and other income.
Forward Foreign Exchange Contracts (“Forwards”)
Autodesk hedges a portion of its exposure in certain
receivables and payables denominated in foreign
currencies using forwards in European and Asian cur-
rencies. Gains and losses associated with exchange
rate fluctuations on forwards are recorded in interest
and other income and offset corresponding gains and
losses on the assets and liabilities being hedged.
The costs of forwards are amortized on a straight-
line basis over the life of the contract as interest and
other income.
Cash and Cash Equivalents
Autodesk considers all highly liquid investments with
insignificant interest rate risk and original maturities
of three months or less to be cash equivalents. Cash
equivalents are recorded at cost, which approximates
fair value.
Marketable Securities
Marketable securities are stated at fair value. Market-
able securities maturing within one year that are not
restricted are classified as current assets.
Autodesk determines the appropriate classification of
its marketable securities at the time of purchase and
reevaluates such classification as of each balance
sheet date.Autodesk has classified all of its marketable
securities as available-for-sale and carries such securi-
ties at fair value, with unrealized gains and losses, net
of tax,reported in stockholders’equity until disposition.
Concentration of Credit Risk
Autodesk places its cash, cash equivalents and mar-
ketable securities with and in the custody of financial
institutions with high credit standing and, by policy,
limits the amounts invested with any one institution,
type of security and issuer.
Autodesk’s accounts receivable are derived from soft-
ware sales to a large number of resellers and dis-
tributors in the Americas, Europe and the Asia Pacific
region. Autodesk performs ongoing evaluations of its
customers’ financial condition and limits the amount
of credit extended when deemed necessary, but
generally requires no collateral. No single customer
accounted for more than 10 percent of consolidated
net revenues in fiscal 2000, 1999 or 1998.
Inventories
Inventories, consisting principally of disks, compact
disks (CDs), user manuals and hardware purchased for
resale are stated at the lower of cost (determined on
the first-in, first-out method) or market.
Computer Equipment,Furniture and
Leasehold Improvements
Computer equipment and furniture are depreciated
using the straight-line and declining balance methods
over the estimated useful lives of the assets, which
range from two to five years.Leasehold improvements
are amortized on a straight-line basis over the shorter
of the estimated useful life or the lease term. Depreci-
ation expense was $30.2 million, $33.0 million and
$29.9 million,in fiscal 2000,1999 and 1998,respectively.