Autodesk 2007 Annual Report Download - page 147

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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)
Autodesk’s product license revenues from distributors and resellers are generally recognized
at the time title to Autodesk’s product passes to the distributor or reseller, provided all other
criteria for revenue recognition are met. Autodesk establishes reserves for product returns 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. These
reserves are recorded as a direct reduction of revenue and accounts receivable at the time the
related revenue is recognized.
Other Revenue
Other revenues include revenues from consulting, training, Autodesk Developers Network
and Advanced Systems customer support Customer consulting and training revenues are
recognized over time, as the services are performed.
Maintenance Revenue
Maintenance revenues consist of revenues from the Company’s Subscription Program.
Under this program, customers are eligible to receive unspecified upgrades when-and-if-available,
downloadable training courses and optional on-line support. Autodesk recognizes revenues from
its Subscription Program ratably over the subscription contract periods.
Shipping and Handling Costs
Shipping and handling costs are included in cost of revenues for all periods presented.
Advertising Expenses
Advertising costs are expensed as incurred. Total advertising expenses incurred were $21.8 million in
fiscal 2007, $26.2 million in fiscal 2006 and $14.8 million in fiscal 2005.
Net Income Per Share
Basic net income per share is computed using the weighted average number of common shares
outstanding during the period. Diluted net income per share is computed using the combination of
the dilutive effect of stock options and the weighted average number of common shares outstanding.
Autodesk has no potentially dilutive securities other than stock options.
Recently Issued Accounting Standards
In September 2006, the SEC staff released Staff Accounting Bulletin No. 108, “Considering the Effects
of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements”
(“SAB 108”) which provides interpretive guidance on how the effects of the carryover or reversal of prior
year misstatements should be considered in quantifying a current year misstatement. We applied the
provisions of SAB 108 using the cumulative effect transition method in connection with the preparation of
our annual financial statements for the year ended January 31, 2007. The adoption of SAB 108 did not have
a material effect on our consolidated financial position, results of operations or cash flows.