Autodesk 2016 Annual Report Download - page 146

2016 Form 10-K 74
Software Development Costs
Software development costs incurred prior to the establishment of technological feasibility are included in research and
development expenses. Autodesk defines establishment of technological feasibility as the completion of a working model.
Software development costs incurred subsequent to the establishment of technological feasibility through the period of general
market availability of the products are capitalized and generally amortized over a three year period, if material. Autodesk had
no material capitalized software development costs at January 31, 2016 and January 31, 2015.
Other Intangible Assets, Net
Other intangible assets include developed technologies, customer relationships, trade names, patents, user lists, and the
related accumulated amortization. These assets are shown as “Developed technologies, net” and as part of “Other assets” in the
Consolidated Balance Sheet. The majority of Autodesk’s other intangible assets are amortized to expense over the estimated
economic life of the product, which ranges from one to ten years. Amortization expense for developed technologies, customer
relationships, trade names, patents, and user lists was $82.6 million in fiscal 2016, $92.9 million in fiscal 2015 and $80.7
million in fiscal 2014.
Other intangible assets and related accumulated amortization at January 31 were as follows:
2016 2015
Developed technologies, at cost $ 571.4 $ 538.4
Customer relationships, trade names, patents, and user lists, at cost (1) 371.6 348.9
Other intangible assets, at cost (2) 943.0 887.3
Less: Accumulated amortization (796.2) (715.4)
Other intangible assets, net $ 146.8 $ 171.9
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(1) Included in “Other assets” in the accompanying Condensed Consolidated Balance Sheets.
(2) Includes the effects of foreign currency translation.
The weighted average amortization period for developed technologies, customer relationships, and trade names during
fiscal 2016 was 4.2 years. Expected future amortization expense for developed technologies, customer relationships, trade
names, patents, and user lists for each of the fiscal years ended thereafter is as follows:
Fiscal Year ended
January 31,
2017 $ 63.1
2018 33.8
2019 24.6
2020 13.4
2021 7.4
Thereafter 4.5
Total $ 146.8
Goodwill
Goodwill consists of the excess of the consideration transferred over the fair value of net assets acquired in business
combinations. Autodesk assigns goodwill to the reporting unit associated with each business combination, and tests goodwill
for impairment annually in its fourth fiscal quarter or more often if circumstances indicate a potential impairment. For purposes
of the goodwill impairment test, a reporting unit is an operating segment or one level below.
Autodesk has the option to perform an assessment of qualitative factors of impairment (“optional assessment”) prior to
necessitating a two-step quantitative impairment test. Should the optional assessment be utilized for any given fiscal year,
qualitative factors to consider include cost factors; financial performance; legal, regulatory, contractual, political, business, or
other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events
and factors affecting the reporting unit. If, after assessing the totality of events or circumstances, it is more likely than not that
2016 Annual Report