Autodesk 2008 Annual Report Download - page 131

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Forward Foreign Exchange Contracts (“Forwards”) and Option Contracts (“Options”)
Autodesk hedges a portion of its European, Asian and Canadian currency exposures in certain receivables
and payables as well as certain anticipated cash flows denominated in foreign currencies using forwards and
options. These foreign currency instruments, by policy, have maturities of less than three months.
In accordance with the provisions of Statement of Financial Accounting Standards No. 133 “Accounting for
Derivative Instruments and Hedging Activities” (“SFAS 133”), Autodesk recognizes all derivative instruments
on the balance sheet at fair value. The accounting for gains and losses resulting from changes in fair value of
derivative instruments will depend upon the use of the derivative and whether it is designated and qualifies for
hedge accounting under SFAS 133.
The costs of forwards are amortized on a straight-line basis over the life of the contract to interest and other
income, net, while option premiums are expensed within the quarter due to the short-term life of the options.
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. Marketable securities maturing within one year that are not
restricted are classified as current assets. Auction rate securities with an estimated fair value of $8.4 million at
January 31, 2008 are classified as non-current marketable securities; for additional information see Note 12,
“Financial Instruments.”
Autodesk determines the appropriate classification of its marketable securities at the time of purchase and
re-evaluates such classification as of each balance sheet date. Autodesk classifies all of its marketable securities
as available-for-sale and carries such securities at fair value, with unrealized gains and losses, net of tax, reported
in stockholders’ equity until disposition or maturity.
All of Autodesk’s available-for-sale marketable securities are subject to a periodic impairment review. The
Company recognizes an impairment charge when a decline in the fair value of its investments below the cost
basis is judged to be other-than-temporary. Autodesk considers various factors in determining whether to
recognize an impairment charge, including the length of time and extent to which the fair value has been less
than Autodesk’s cost basis, the financial condition and near-term prospects of the investee, and Autodesk’s intent
and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in the
market value. Autodesk has recorded $0.6 million of unrealized loss, which was considered temporary, through
other comprehensive income during fiscal year 2008. No impairment charges were recorded on any investments
during the years ended 2007 or 2006. For additional information, see “Concentration of Credit Risk” within this
Note 1, and Note 12, “Financial Instruments.”
55
2008 Annua
l Report