Autodesk 2006 Annual Report Download - page 102

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Recently Issued Accounting Standards
In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 — revised 2004,
“Share-Based Payment,” (“SFAS 123R”) which replaces Statement of Financial Accounting Standards No. 123
(“SFAS 123”) and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” SFAS 123R requires
the measurement of all share-based payments to employees, including grants of employee stock options, using
a fair-value based method and the recording of such expense in the Company’s Consolidated Statements of
Income. Autodesk is required to adopt SFAS 123R starting in the first quarter of fiscal 2007. The pro forma
disclosures previously permitted under SFAS 123 will no longer be an alternative to financial statement
recognition. See “Employee StockCompensation” within this Note 1 for the pro forma net income and net income
per share amounts for fiscal 2006, 2005 and 2004, as if the Company had used a fair-value based method similar
to the methods required under SFAS 123R to measure compensation expense for employee stock awards.
Autodesk believes the adoption of SFAS 123R will result in amounts that are similar to the current pro forma
disclosures under SFAS 123 and that the adoption of SFAS 123R will have a material adverse effect on Autodesk’s
Consolidated Statements of Income and net income per share. This estimated impact is contingent upon many
factors including, but not limited to, the Company’s market value of its common stock on the date future options
are granted.
In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”), “Share-Based Payment,” which
provides interpretive guidance related to the interaction between SFAS 123R and certain SEC rules and
regulations, as well as provides the SEC staff’s views regarding the valuation of share-based payment
arrangements. The relevant interpretive guidance of SAB 107 will be applied in connection with its
implementation and adoption of SFAS 123R.
In June 2005, the FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes
and Error Corrections” (“SFAS 154”), a replacement of APB Opinion 20, “Accounting Changes”, and SFAS No. 3,
“Reporting Accounting Changes in Interim Financial Statements”. SFAS 154 changes the requirements for the
accounting for and reporting of a change in accounting principle. Previously, most voluntary changes in
accounting principles were required recognition via a cumulative effect adjustment within net income of the
period of change. SFAS 154 requires retrospective application to prior periods’ financial statements, unless it is
impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS 154
is effective for accounting changes made in fiscal years beginning after December 15, 2005; however, SFAS 154
does not change the transition provisions of any existing accounting pronouncements. Autodesk does not believe
adoption of SFAS 154 will have a material effect on its consolidated financial position, results of operations or
cash flows.
Stock Splits
On November 16, 2004, the Company’s Board of Directors authorized a two-for-one stock split in the form
of a stock dividend, payable to stockholders of record as of December 6, 2004. All references in the consolidated
financial statements and notes thereto with respect to the number of shares, per share amounts and market prices
of Autodesk’s common stock have been restated to reflect the effect of this stock split.
Reclassifications
Certain reclassifications have been made to the fiscal 2005 and 2004 balances to conform to the 2006
presentation. Autodesk reclassified its January 31, 2005 Consolidated Balance Sheet, conforming it to the 2006
presentation, to properly reflect the long-term portions of certain foreign pension liabilities and restructuring
reserves from current liabilities to other liabilities. Prior to fiscal year 2005, Autodesk reported amortization of
purchased intangibles together with amortization of goodwill separately on its Consolidated Statements of
Income. Given Autodesk no longer amortizes goodwill, and total amortization of purchased intangibles is not
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Business and Summary of Significant Accounting Policies (Continued)
56