Autodesk 2016 Annual Report Download - page 143

2016 Form 10-K 71
Reclassifications
During the second quarter of fiscal 2015, Autodesk elected to present amortization of purchased customer relationships,
trade names, patents, and user lists as a separate line item within operating expenses. As a result, amortization previously
reflected in “General and Administrative” expense was reclassified to “Amortization of Purchased Intangibles" within
Operating Expenses. These expenses have been reclassified in the Consolidated Statements of Operations for fiscal years 2015
and 2014 to conform to the current period presentation as follows:
Fiscal year ended
January 31,
2015 2014
Reclassifications within operating expenses:
(Decrease) to general and administrative $ (10.9) $ (36.5)
Increase to amortization of purchased intangibles 10.9 36.5
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in Autodesk’s consolidated financial
statements and notes thereto. These estimates are based on information available as of the date of the consolidated financial
statements. On a regular basis, management evaluates these estimates and assumptions. Actual results may differ materially
from these estimates.
Examples of significant estimates and assumptions made by management involve the determination of the fair value of
acquired assets and liabilities, goodwill, financial instruments, long-lived assets and other intangible assets, the realizability of
deferred tax assets, and the fair value of stock awards. The Company also makes assumptions, judgments, and estimates in
determining the accruals for uncertain tax positions, variable compensation, partner incentive programs, product returns
reserves, allowances for doubtful accounts, asset retirement obligations, and legal contingencies.
Foreign Currency Translation and Transactions
The assets and liabilities of Autodesk’s foreign subsidiaries are translated from their respective functional currencies into
U.S. dollars at the rates in effect at the balance sheet date, and revenue and expense amounts are translated at exchange rates
that approximate those rates in effect during the period in which the underlying transactions occur. Foreign currency translation
adjustments are recorded as other comprehensive (loss) income.
Gains and losses realized from foreign currency transactions, those transactions denominated in currencies other than the
foreign subsidiary’s functional currency, are included in interest and other income, net. Monetary assets and liabilities are
remeasured using foreign currency exchange rates at the end of the period, and non-monetary assets are remeasured based on
historical exchange rates.
Derivative Financial Instruments
Under its risk management strategy, Autodesk uses derivative instruments to manage its short-term exposures to
fluctuations in foreign currency exchange rates which exist as part of ongoing business operations. Autodesk’s general practice
is to hedge a majority of transaction exposures denominated in euros, Japanese yen, Swiss francs, British pounds, Canadian
dollars, and Australian dollars. These instruments have maturities between one to 12 months in the future. Autodesk does not
enter into any derivative instruments for trading or speculative purposes.
The bank counterparties in all contracts expose Autodesk to credit-related losses in the event of their nonperformance.
However, to mitigate that risk, Autodesk only contracts with counterparties who meet the Company’s minimum requirements
under its counterparty risk assessment process. Autodesk monitors ratings, credit spreads, and potential downgrades on at least
a quarterly basis. Based on Autodesk’s on-going assessment of counterparty risk, the Company will adjust its exposure to
various counterparties. Autodesk generally enters into master netting arrangements, which reduce credit risk by permitting net
settlement of transactions with the same counterparty. However, Autodesk does not have any master netting arrangements in
place with collateral features.
2016 Annual Report