Autodesk 2016 Annual Report Download - page 142

2016 Form 10-K 70
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
(Tables in millions of dollars, except per share data, unless otherwise indicated)
1. Business and Summary of Significant Accounting Policies
Business
Autodesk, Inc. (“Autodesk” or the “Company”) is a world leading design software and services company, offering
customers productive business solutions through powerful technology products and services. The Company serves customers in
the architecture, engineering, and construction; manufacturing; and digital media, consumer, and entertainment industries. The
Company’s sophisticated software products enable its customers to experience their ideas before they are real by allowing them
to imagine, design, and create their ideas and to visualize, simulate, and analyze real-world performance early in the design
process by creating digital prototypes. These capabilities allow Autodesk’s customers to foster innovation, optimize and
improve their designs, help save time and money, improve quality, and collaborate with others. Autodesk software products are
sold globally, both directly to customers and through a network of resellers and distributors.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of Autodesk and its wholly-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated.
Current Period Adjustments
Subsequent to furnishing preliminary financial statements on Form 8-K on February 25, 2016 for the three and twelve
months ended January 31, 2016, Autodesk identified a $4.5 million tax adjustment associated with deemed foreign withholding
taxes related to non-permanently reinvested earnings in foreign jurisdictions which have not yet repatriated resulting in changes
to the Consolidated Financial Statements as reflected in this Annual Report on Form 10-K. This non-cash adjustment resulted in
an increase to GAAP diluted loss per share from $(1.44) to $(1.46) for the full fiscal year.
Prior Period Adjustments
Autodesk previously established a valuation allowance against the Company’s deferred tax assets during the three months
ended July 31, 2015. In the course of preparing the Condensed Consolidated Financial Statements for the three and nine months
ended October 31, 2015, Autodesk determined that it had understated income tax expense by $33.1 million for the three and six
months ended July 31, 2015, primarily related to an error in the establishment of the valuation allowance, which had been
understated at July 31, 2015. Autodesk performed the analysis required by Staff Accounting Bulletin 99, Materiality, to
evaluate the materiality of the error, quantitatively and qualitatively, and concluded it was not material to the Company’s
Condensed Consolidated Financial Statements as of July 31, 2015 and for the three and six month periods ended July 31, 2015.
However, in light of the significance of a correction of the error to the results for the three months ended October 31, 2015,
Autodesk chose to correct the error by revising the previously reported results for the three and six months ended July 31, 2015,
to include the additional $33.1 million of non-cash income tax expense associated with the establishment of the valuation
allowance. See Note 16, "Selected Quarterly Financial Information (Unaudited)," in the Notes to the Condensed Consolidated
Financial Statements for further discussion.
During the quarter ended April 30, 2015, Autodesk determined that it had not correctly accounted for certain liabilities
primarily related to employee benefits and unclaimed property. As a result, we recorded $5.7 million of additional operating
expenses related to prior periods. As these adjustments were related to the correction of errors, Autodesk performed the analysis
required by Staff Accounting Bulletin 99, Materiality, and Staff Accounting Bulletin 108, Considering the Effects of Prior Year
Misstatements When Quantifying Misstatements in Current Year Financial Statements. Based on this analysis, Autodesk
concluded that the effect of the errors was not material to the financial position, results of operations or cash flows of any prior
fiscal year from both a quantitative and qualitative perspective and is not material to the full fiscal year 2016.
2016 Annual Report