Autodesk 2012 Annual Report Download - page 126

Autodesk estimates expected volatility for stock-based awards based on the average of the following two measures. The
first is a measure of historical volatility in the trading market for the Company’s common stock, and the second is the implied
volatility of traded forward call options to purchase shares of the Company’s common stock.
Autodesk estimates the expected life of stock-based awards using both exercise behavior and post-vesting termination
behavior as well as consideration of outstanding options.
Autodesk did not pay cash dividends in fiscal 2012, 2011 or 2010 and does not anticipate paying any cash dividends in
the foreseeable future. Consequently, an expected dividend yield of zero is used in the BSM option pricing model.
The risk-free interest rate used in the BSM option pricing model for stock-based awards is the historical yield on U.S.
Treasury securities with equivalent remaining lives.
Autodesk only recognizes expense for the stock-based awards that are ultimately expected to vest. Therefore, Autodesk
has developed an estimate of the number of awards expected to cancel prior to vesting (“forfeiture rate”). The forfeiture rate is
estimated based on historical pre-vest cancellation experience, and is applied to all stock-based awards. The Company
estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those
estimates.
Advertising Expenses
Advertising costs are expensed as incurred. Total advertising expenses incurred were $21.3 million in fiscal 2012, $18.8
million in fiscal 2011 and $18.4 million in fiscal 2010.
Net Income Per Share
Basic net income per share is computed based on the weighted average number of shares of common stock outstanding
for the period, including restricted stock awards and excluding stock options and restricted stock units. Diluted net income per
share is computed based upon the weighted average shares of common shares outstanding for the period and potentially
dilutive common shares, including the effect of stock options and restricted stock units under the treasury stock method.
Accounting Standards in Fiscal 2012
With the exception of those discussed below, there have been no recent changes in accounting pronouncements issued by
the Financial Accounting Standards Board (“FASB”) or adopted by the Company during the fiscal year ended January 31,
2012, that are of significance, or potential significance, to the Company.
Accounting Standards Adopted
In December 2010, the FASB issued Accounting Standard Update (“ASU”) 2010-29 regarding Accounting Standards
Codification (“ASC”) Topic 805 “Business Combinations.” This ASU updates accounting guidance to clarify that pro forma
disclosures should be presented as if a business combination occurred at the beginning of the prior annual period for purposes
of preparing both the current reporting period and the prior reporting period pro forma financial information. These disclosures
should be accompanied by a narrative description about the nature and amount of material, nonrecurring pro forma
adjustments. The new accounting guidance was effective for business combinations consummated in periods beginning after
December 15, 2010, and should be applied prospectively as of the date of adoption. Autodesk adopted the new disclosures
under ASU 2010-29 effective February 1, 2011. The adoption of this ASU did not have an impact on Autodesk's consolidated
statements of financial position, results of operations or cash flows. The impact of ASU 2010-29 on Autodesk's future
disclosures will be dependent on the size of the business combinations that it consummates in future periods.
In December 2010, the FASB issued ASU 2010-28 regarding ASC Topic 350 “Intangibles - Goodwill and Other.” This
ASU updates accounting guidance related to the calculation of the carrying amount of a reporting unit when performing the
first step of a goodwill impairment test. More specifically, this update requires an entity to use an equity premise when
performing the first step of a goodwill impairment test and if a reporting unit has a zero or negative carrying amount, the entity
must assess and consider qualitative factors and whether it is more likely than not that a goodwill impairment exists. The new
accounting guidance was effective for public entities, for impairment tests performed during entities' fiscal years (and interim
periods within those years) that begin after December 15, 2010. Autodesk adopted the changes under ASU 2010-28 effective
February 1, 2011. The adoption of this ASU did not have a material impact on Autodesk's consolidated statements of financial
position, results of operations or cash flows.
In January 2010, the FASB issued ASU 2010-06 regarding ASC Topic 820 “Fair Value Measurements and Disclosures.”
This ASU requires additional disclosure regarding significant transfers in and out of Levels 1 and 2 fair value measurements
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