Autodesk 2010 Annual Report Download - page 153

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
technological feasibility through the period of general market availability of the products are capitalized and
generally amortized over a one year period, if material. Autodesk had no capitalized software development costs
at January 31, 2010 and January 31, 2009.
Purchased Technologies, Net
The majority of Autodesk’s purchased technologies are amortized over the estimated economic life of the
product, which ranges from two to seven years. Amortization expense, which is included as a component of cost
of revenue, was $34.4 million in fiscal 2010, $26.3 million in fiscal 2009 and $15.9 million in fiscal 2008.
Purchased technologies and related accumulated amortization at January 31 were as follows:
2010 2009
Purchased technologies ........................................ $311.5 $ 302.4
Less: Accumulated amortization ................................ (223.5) (189.1)
Purchased technologies, net .................................... $ 88.0 $ 113.3
In addition, purchased technologies include $4.3 million of in-process research and development technology
as of January 31, 2010. In-process research and development technology is an indefinite lived asset that is held
and tested at least annually for impairment until such time that technological feasibility is achieved. Once
technological feasibility is achieved, the technology will be amortized to expense over an applicable useful life.
Prior to February 1, 2009, Autodesk expensed in-process research and development to research and development
expense in the period it was acquired.
The weighted average amortization period for purchased technologies acquired during fiscal 2010 was 3.0
years. Expected future amortization expense for purchased technologies, excluding indefinitely-lived in-process
research and development, for each of the fiscal years ended thereafter is as follows:
Year ending
January 31,
2011 .................................................................... $31.1
2012 .................................................................... 24.2
2013 .................................................................... 14.4
2014 .................................................................... 10.2
2015 .................................................................... 3.5
Thereafter ................................................................ 0.3
Total .................................................................... $83.7
Goodwill
Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations.
Autodesk assigns goodwill to the reportable segment associated with each business combination, and tests
goodwill for impairment annually in its fourth fiscal quarter or more often if and when circumstances indicate
potential impairment. When assessing goodwill for impairment, Autodesk uses discounted cash flow models that
include assumptions regarding reportable segments’ projected cash flows (“Income Approach”) and corroborates
it with the estimated consideration that the Company 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 Autodesk’s
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