Autodesk 2016 Annual Report Download - page 151

2016 Form 10-K 79
Autodesk recognizes expense only for the stock-based awards that are ultimately expected to vest. Therefore, Autodesk
has developed an estimate of the number of awards expected to cancel prior to vesting (“forfeiture rate”). The forfeiture rate is
estimated based on historical pre-vest cancellation experience and is applied to all stock-based awards. The Company estimates
forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates.
Advertising Expenses
Advertising costs are expensed as incurred. Total advertising expenses incurred were $29.8 million in fiscal 2016, $23.9
million in fiscal 2015, and $15.6 million in fiscal 2014.
Net (Loss) Income Per Share
Basic net (loss) income per share is computed based on the weighted average number of shares of common stock
outstanding for the period, excluding stock options and restricted stock units. Diluted net (loss) income per share is computed
based upon the weighted average shares of common shares outstanding for the period and potentially dilutive common shares,
including the effect of stock options and restricted stock units under the treasury stock method.
Defined Benefit Pension Plans
The funded status of Autodesk's defined benefit pension plans is recognized in the Consolidated Balance Sheets. The
funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation for the
fiscal years presented. The projected benefit obligation represents the actuarial present value of benefits expected to be paid
upon retirement based on employee services already rendered and estimated future compensation levels. The fair value of plan
assets represents the current market value of Autodesk's cumulative company and participant contributions made to the various
plans in effect.
Net periodic benefit cost is recorded in the Consolidated Statements of Operations and includes service cost, interest cost,
expected return on plan assets, amortization of prior service costs, and gains or losses previously recognized as a component of
other comprehensive income. Certain events, such as changes in the employee base, plan amendments, and changes in actuarial
assumptions may result in a change in the defined benefit obligation and the corresponding change to other comprehensive
income.
Gains and losses and prior service costs not recognized as a component of net periodic benefit cost in the Consolidated
Statements of Operations as they arise are recognized as a component of other comprehensive (loss) income in the Consolidated
Statements of Comprehensive (Loss) Income. Those gains and losses and prior service costs are subsequently amortized as a
component of net periodic benefit cost over the average remaining service lives of the plan participants using a corridor
approach to determine the portion of gain or loss subject to amortization.
The measurement of projected benefit obligations and net periodic benefit cost is based on estimates and assumptions that
reflect the terms of the plans and use participant-specific information such as compensation, age and years of services, as well
as certain assumptions, including estimates of discount rates, expected return of plan assets, rate of compensation increases,
interest rates, and mortality rates.
Accounting Standards in Fiscal 2016
With the exception of those discussed below, there have been no recent changes in accounting pronouncements issued by
the FASB or adopted by the Company during the fiscal year ended January 31, 2016, that are of significance, or potential
significance, to the Company.
Accounting Standards Adopted
Effective in the fourth quarter of fiscal 2016, Autodesk elected to early adopt FASB's Accounting Standards Update No.
2015-17 ("ASU 2015-17") regarding ASC Topic 470 "Income Taxes: Balance Sheet Classification of Deferred Taxes." The
amendments in ASU 2015-17 require deferred tax assets and liabilities, along with any related valuation allowances, to be
classified as noncurrent on the consolidated balance sheet. The amendments for ASU-2015-17 were prospectively applied. Prior
periods were not retrospectively adjusted and remain presented as current or non-current in accordance with the previous
2016 Annual Report