Autodesk 2016 Annual Report Download - page 144

2016 Form 10-K 72
Autodesk accounts for its derivative instruments as either assets or liabilities on the balance sheet and carries them at fair
value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether
it is designated and qualifies for hedge accounting. Derivatives that do not qualify for hedge accounting are adjusted to fair value
through earnings. See Note 2, "Financial Instruments" for information regarding Autodesk's hedging activities.
Cash and Cash Equivalents
Autodesk considers all highly liquid investments with insignificant interest rate risk and remaining maturities of three
months or less at the date of purchase to be cash equivalents. Cash equivalents are recorded at cost, which approximates fair
value.
Marketable Securities
Marketable securities are stated at fair value. Marketable securities maturing within one year that are not restricted are
classified as current assets.
Autodesk determines the appropriate classification of its marketable securities at the time of purchase and re-evaluates
such classification as of each balance sheet date. Autodesk carries all “available-for-sale securities” at fair value, with
unrealized gains and losses, net of tax, reported in stockholders’ equity until disposition or maturity. Autodesk carries all
“trading securities” at fair value, with unrealized gains and losses, recorded in “Interest and other income, net” in the
Company’s Consolidated Statements of Operations. The cost of securities sold is based on the specific-identification method.
All of Autodesk’s marketable securities are subject to a periodic impairment review. The Company recognizes an
impairment charge when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary.
Autodesk considers various factors in determining whether to recognize an impairment charge, including the length of time and
extent to which the fair value has been less than Autodesk’s cost basis, the financial condition and near-term prospects of the
investee, and Autodesk’s intent and ability to hold the investment for a period of time sufficient to allow for any anticipated
recovery in the market value. For additional information, see “Concentration of Credit Risk” within this Note 1 and Note 2,
“Financial Instruments.”
Accounts Receivable, Net
Accounts receivable, net, consisted of the following as of January 31:
2016 2015
Trade accounts receivable $ 700.1 $ 495.4
Less: Allowance for doubtful accounts (7.6) (6.3)
Product returns reserve (1.6) (2.6)
Partner programs and other obligations (37.3) (27.6)
Accounts receivable, net $ 653.6 $ 458.9
Allowances for uncollectible trade receivables are based upon historical loss patterns, the number of days that billings are
past due, and an evaluation of the potential risk of loss associated with problem accounts.
The product returns reserves are based on historical experience of actual product returns, estimated channel inventory
levels, the timing of new product introductions, channel sell-in for applicable markets, and other factors.
As part of the indirect channel model, Autodesk has a partner incentive program that uses quarterly attainment of
monetary rewards to motivate distributors and resellers to achieve mutually agreed upon business goals in a specified time
period. A portion of these incentives reduce license and other revenue in the current period. The remainder, which relates to
incentives on our Subscription Program, is recorded as a reduction to deferred revenue in the period the subscription transaction
is billed and subsequently recognized as a reduction to subscription revenue over the contract period. These incentive balances
do not require significant assumptions or judgments. The reserves associated with the partner incentive program are treated on
the balance sheet as either contra account receivable (when due to distributors and direct resellers) or accounts payable (when
due to indirect resellers).
2016 Annual Report