Autodesk 2009 Annual Report Download - page 138

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AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
impairment. When assessing goodwill for impairment, Autodesk uses discounted cash flow models which include
assumptions regarding reportable segments’ projected future cash flows (“Income Approach”) and corroborates it
with the estimated consideration which Autodesk would receive if there were to be a sale of the reporting segment
(“Market Approach”). Variances in these assumptions could have a significant impact on the conclusion as to
whether goodwill is impaired or the amount of the impairment charge. Impairment charges, if any, result from
instances where the fair value of net assets associated with goodwill are less than their carrying values.
During the three months ended January 31, 2009, revenue and cash flow projections for all reportable
segments decreased substantially as the global economy worsened. The decrease in revenue projections for the
Media and Entertainment (“M&E”) segment significantly reduced discounted future cash flows, resulting in an
estimate of the fair value of goodwill that was below its carrying value.
As a result of the impairment testing, the carrying value of the M&E goodwill was deemed to exceed the
allocated fair value and Autodesk recorded a $128.2 million goodwill impairment charge associated with the
M&E segment affecting the fourth quarter of fiscal 2009. The M&E segment was the only segment which had a
current fair value that fell below the carrying value of its assets. Should our revenue and cash flow projections
decline significantly in the future, additional impairment charges may be recorded on goodwill. There was no
impairment of goodwill during the years ended January 31, 2008 and 2007.
The changes in the carrying amount of goodwill during the years ended January 31, 2009 and 2008 are as
follows:
Platform
Solutions and
Emerging
Business and
Other
Architecture,
Engineering
and
Construction
Manufacturing
Solutions
Media and
Entertainment Total
Balance as of January 31, 2007 . . . . . . . . . . . . . . . . $ 1.6 $163.3 $ 94.9 $ 95.5 $ 355.3
Addition arising from Robobat acquisition . . . — 25.9 — — 25.9
Addition arising from NavisWorks
acquisition .......................... — 9.3 — — 9.3
Additions arising from other acquisitions . . . . — 2.3 35.8 12.2 50.3
Effect of foreign currency translation,
purchase accounting adjustments and
other ............................... — — 2.6 — 2.6
Balance as of January 31, 2008 . . . . . . . . . . . . . . . . 1.6 200.8 133.3 107.7 443.4
Addition arising from Moldflow
acquisition .......................... — — 124.9 — 124.9
Addition arising from Softimage
acquisition .......................... — — — 21.0 21.0
Addition arising from ALGOR acquisition . . . — — 16.4 — 16.4
Additions arising from other acquisitions .... 34.7 13.7 4.2 18.8 71.4
Impairment ............................ — — — (128.2) (128.2)
Effect of foreign currency translation,
purchase accounting adjustments and
other ............................... — (5.1) (3.0) 1.7 (6.4)
Balance as of January 31, 2009 ................ $36.3 $209.4 $275.8 $ 21.0 $ 542.5
Purchase accounting adjustments reflect revisions made to the Company’s preliminary purchase price
allocation during fiscal 2009 and 2008.
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