Autodesk 2015 Annual Report Download - page 119

2015 Form 10-K 27
is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting
identified by management.
If our management identifies one or more material weaknesses in our internal control over financial reporting and such
weakness remains uncorrected at fiscal year-end, we will be unable to assert such internal control is effective at fiscal year-end.
If we are unable to assert that our internal control over financial reporting is effective at fiscal year-end (or if our independent
registered public accounting firm is unable to express an opinion on the effectiveness of our internal controls or concludes that
we have a material weakness in our internal controls), we could lose investor confidence in the accuracy and completeness of
our financial reports, which would likely have an adverse effect on our business and stock price.
In preparing our financial statements we make certain assumptions, judgments, and estimates that affect amounts reported in
our consolidated financial statements, which, if not accurate, may significantly impact our financial results.
We make assumptions, judgments, and estimates for a number of items, including the fair value of financial instruments,
goodwill, long-lived assets and other intangible assets, the realizability of deferred tax assets, and the fair value of stock awards.
We also make assumptions, judgments, and estimates in determining the accruals for employee related liabilities including
commissions, bonuses, and sabbaticals; and in determining the accruals for uncertain tax positions, partner incentive programs,
product returns reserves, allowances for doubtful accounts, asset retirement obligations, and legal contingencies. These
assumptions, judgments, and estimates are drawn from historical experience and various other factors that we believe are
reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially
from our estimates, and such differences could significantly impact our financial results.
Our financial results could be negatively impacted if our tax positions are overturned by tax authorities.
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Our effective tax
rate is based on our expected geographic mix of earnings, statutory rates, intercompany transfer pricing, and enacted tax rules.
Significant judgment is required in determining our effective tax rate and in evaluating our tax positions on a worldwide basis.
We believe our tax positions, including intercompany transfer pricing policies, are consistent with the tax laws in the
jurisdictions in which we conduct our business. It is possible that these positions may be overturned by jurisdictional tax
authorities and may have a significant impact on our effective tax rate.
We rely on third-party technologies and if we are unable to use or integrate these technologies, our product and service
development may be delayed and our financial results negatively impacted.
We rely on certain software that we license from third parties, including software that is integrated with internally
developed software and used in our products to perform key functions. These third-party software licenses may not continue to
be available on commercially reasonable terms, and the software may not be appropriately supported, maintained or enhanced
by the licensors. The loss of licenses to, or inability to support, maintain, and enhance any such software could result in
increased costs, or in delays or reductions in product shipments until equivalent software can be developed, identified, licensed,
and integrated, which would likely harm our business.
Disruptions with licensing relationships and third-party developers could adversely impact our business.
We license certain key technologies from third parties. Licenses may be restricted in the term or the use of such
technology in ways that negatively affect our business. Similarly, we may not be able to obtain or renew license agreements for
key technology on favorable terms, if at all, and any failure to do so could harm our business.
Our business strategy has historically depended in part on our relationships with third-party developers who provide
products that expand the functionality of our design software. Some developers may elect to support other products or may
experience disruption in product development and delivery cycles or financial pressure during periods of economic downturn.
In particular markets, such disruptions have in the past, and would likely in the future, negatively impact these third-party
developers and end users, which could harm our business.
Additionally, technology created by outsourced product development, whether outsourced to third parties or developed
externally and transferred to us through business or technology acquisitions, have certain additional risks such as effective
integration into existing products, adequate transfer of technology know-how, and ownership and protection of transferred
intellectual property.
2015 Annual Report