Autodesk 2007 Annual Report Download - page 137

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2007 Annual Report
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Business and Summary of Significant Accounting Policies (Continued)
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.
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. For additional information, see
Note 14, “Financial Instruments.”
Accounts Receivable, Net
Accounts receivable, net consisted of the following as of January 31:
2007 2006
Trade accounts receivable ............................................. $341.5 $288.7
Less: Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9.9)(8.2)
Less: Product returns and other reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (30.3)(19.1)
$301.3 $ 261.4
Allowances for uncollectible trade receivables are based upon historical loss patterns, the number
of days that billings are past due and an evaluation of the potential risk of loss associated with problem
accounts.
The product returns and other reserves are based on historical experience of actual product returns,
estimated channel inventory levels, the timing of new product introductions, channel sell-in for applicable
markets and other factors.