Autodesk 2007 Annual Report Download - page 148

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 1. Business and Summary of Significant Accounting Policies (Continued)
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB
Statements No. 87, 88, 106 and 132(R)” (“SFAS 158”). This Statement requires recognition of the funded
status of a benefit plan in the statement of financial position. The Standard also requires recognition in
other comprehensive income of certain gains and losses that arise during the period but are deferred
under pension accounting rules, as well as modifies the timing of reporting and adds certain disclosures.
SFAS 158 provides recognition and disclosure elements to be effective as of the end of the fiscal year after
December 15, 2006 and measurement elements to be effective for fiscal years ending after December 15,
2008. Autodesk adopted the recognition and disclosure elements of the Statement which did not have a
material effect on the Company’s consolidated financial position, results of operations or cash flows. In
addition, Autodesk adopted the measurement elements of SFAS 158 as of February 1, 2007, the beginning
of its fiscal year 2008. The adoption of the measurement elements of SFAS 158 did not have a material
effect on the Company’s consolidated financial position, results of operations or cash flows.
In September 2006, the FASB also issued Statement of Financial Accounting Standards No. 157, “Fair
Value Measurements” (“SFAS 157”), which defines fair value, establishes a framework for measuring fair
value and expands disclosures about fair value measurements. SFAS 157 does not require any new fair
value measurements but instead is intended to eliminate inconsistencies with respect to this topic found
in various other accounting pronouncements. This Statement is effective for Autodesk’s 2009 fiscal year,
including interim periods within our 2009 fiscal year. Autodesk does not believe the adoption of SFAS 157
will have a material effect on its consolidated financial position, results of operations or cash flows.
In July 2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes—an interpretation
of FASB Statement No. 109,” which clarifies the accounting for uncertainty in tax positions. Under FIN
48, companies are required to recognize the benefit from a tax position only if it is “more likely than
not” that the tax position would be sustained upon audit based solely on the technical merits of the tax
position. FIN 48 clarified how a company would measure the income tax benefits from the tax positions
that are recognized, provides guidance as to the derecognition of previously recognized tax benefits and
describes the methods for classifying and disclosing the liabilities within the financial statements for any
unrecognized tax benefits. The provisions of FIN 48 are effective as of the beginning of the Company’s 2008
fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment
to opening retained earnings. Based on the Company’s assessment, Autodesk recorded an increase to
opening retained earnings during the first quarter of fiscal 2008 for tax benefits not previously recognized
of approximately $26 million as a result of adopting FIN 48.
In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments”
(“SFAS 155”). This Statement amends Statement of Financial Accounting Standards No. 133, “Accounting
for Derivative Instruments and Hedging Activities” (“SFAS 133”) and Statement of Financial Accounting
Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities” (“SFAS 140”). SFAS 155 simplifies the accounting for certain derivatives embedded in other
financial instruments by allowing them to be accounted for as a whole if the holder elects to account for
the whole instrument on a fair value basis. SFAS 155 also clarifies and amends certain other provisions
of SFAS 133 and SFAS 140. The provisions of SFAS 155 are effective as of the beginning of Autodesk’s
2008 fiscal year. The adoption of SFAS 155 did not have a material effect on the Company’s consolidated
financial position, results of operations or cash flows.