Autodesk 2008 Annual Report Download - page 130

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2007
(In millions of dollars, except share and per share data)
Note 1. Business and Summary of Significant Accounting Policies
Business
Autodesk, Inc. (“Autodesk” or the “Company”) is one of the world’s leading design software and services
companies, offering customers progressive business solutions through powerful technology products and
services. The Company helps customers in the architectural, engineering, construction, manufacturing, geospatial
mapping and digital media markets. The Company’s state of the art software products enable its customers to
experience their ideas before they are real by allowing them to create and document their designs and to
visualize, simulate and analyze real-world performance early in the design process by creating digital prototypes.
These capabilities give Autodesk’s customers the flexibility to optimize and improve their designs before they
actually begin the building process, helping save time and money, improving quality and fostering innovation.
Autodesk software products are sold in over 160 countries, both directly to customers and through a network of
resellers and distributors.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Autodesk and its wholly-
owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been
eliminated.
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 consolidated
financial statements and notes thereto. These estimates are based on information available as of the date of the
consolidated financial statements. On a regular basis, management evaluates these estimates and assumptions.
Actual results may differ materially from these estimates.
Examples of significant estimates and assumptions made by management involve the determination of the
fair value of stock awards to employees and directors (See “Employee Stock-Based Compensation” within this
Note 1 and Note 2, “Employee and Director Benefit Plans,” for further discussion), product returns accruals,
partner incentive accruals, allowance for doubtful accounts, tax accruals, the realizability of deferred tax assets
and long-lived assets, goodwill valuation, and legal settlement reserves.
Foreign Currency Translation
The assets and liabilities of Autodesk’s 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 recorded as
other comprehensive income.
Gains and losses realized from foreign currency transactions, those transactions denominated in currencies
other than the foreign subsidiary’s functional currency, are included in interest and other income, net.
54