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Income Taxes | 12 Months Ended
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Jan. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes consists of the following:
| Fiscal year ended January 31,
2017 |  | 2016 |  | 2015
Federal: |  |  |  |  |
Current | $ | 1.6 |  |  | $ | (4.7 | ) |  | $ | (43.8 | )
Deferred | 8.4 |  |  | 220.9 |  |  | (11.9 | )
State: |  |  |  |  |
Current | (1.9 | ) |  | 0.5 |  |  | (13.2 | )
Deferred | 1.3 |  |  | 20.9 |  |  | 9.0 |
Foreign: |  |  |  |  |
Current | 93.9 |  |  | 68.4 |  |  | 69.5 |
Deferred | (45.0 | ) |  | 4.2 |  |  | (8.4 | )
| $ | 58.3 |  |  | $ | 310.2 |  |  | $ | 1.2 |
Foreign pretax income (loss) was $(27.6) million in fiscal 2017, $218.2 million in fiscal 2016, and $302.5 million in fiscal 2015. The differences between the U.S. statutory rate and the aggregate income tax provision are as follows:
| Fiscal year ended January 31,
2017 |  | 2016 |  | 2015
Income tax provision (benefit) at U.S. Federal statutory rate | $ | (177.0 | ) |  | $ | (7.1 | ) |  | $ | 29.0 |
State income tax benefit, net of the U.S. Federal benefit | (17.3 | ) |  | (7.6 | ) |  | (4.0 | )
Foreign income taxed at rates different from the U.S. statutory rate | 22.3 |  |  | (29.4 | ) |  | (40.0 | )
U.S. valuation allowance | 233.0 |  |  | 345.0 |  |  | 2.9 |
Increase in attributes due to ASU 2016-9 adoption | (119.4 | ) |  | — |  |  | — |
Change in valuation allowance from ASU 2016-9 adoption | 119.4 |  |  | — |  |  | — |
Tax effect of non-deductible stock-based compensation | 18.8 |  |  | 19.3 |  |  | 15.7 |
Stock compensation windfall shortfall | (23.0 | ) |  | — |  |  | — |
Research and development tax credit benefit | (10.3 | ) |  | (9.4 | ) |  | (7.2 | )
Closure of income tax audits and changes in uncertain tax positions | 8.2 |  |  | (4.7 | ) |  | (0.7 | )
Tax effect of officer compensation in excess of $1.0 million | 2.2 |  |  | 1.4 |  |  | 2.4 |
Non-deductible expenses | 2.0 |  |  | 2.6 |  |  | 2.2 |
Other | (0.6 | ) |  | 0.1 |  |  | 0.9 |
| $ | 58.3 |  |  | $ | 310.2 |  |  | $ | 1.2 |
Significant components of Autodesk’s deferred tax assets and liabilities are as follows:
| January 31,
2017 |  | 2016
Stock-based compensation | $ | 37.6 |  |  | $ | 37.5 |
Research and development tax credit carryforwards | 136.7 |  |  | 91.3 |
Foreign tax credit carryforwards | 127.3 |  |  | 51.1 |
Accrued compensation and benefits | 39.5 |  |  | 41.5 |
Other accruals not currently deductible for tax | 18.7 |  |  | 23.6 |
Purchased technology and capitalized software | 76.9 |  |  | 64.3 |
Fixed assets | 24.3 |  |  | 18.6 |
Tax loss carryforwards | 173.6 |  |  | 17.6 |
Deferred Revenue | 128.3 |  |  | 56.7 |
Other | 27.6 |  |  | 13.9 |
Total deferred tax assets | 790.5 |  |  | 416.1 |
Less: valuation allowance | (748.0 | ) |  | (398.0 | )
Net deferred tax assets | 42.5 |  |  | 18.1 |
Indefinite lived intangibles | (70.1 | ) |  | (54.1 | )
Unremitted earnings of foreign subsidiaries | — |  |  | (22.4 | )
Total deferred tax liabilities | (70.1 | ) |  | (76.5 | )
Net deferred tax assets | $ | (27.6 | ) |  | $ | (58.4 | )
Autodesk’s tax expense is primarily driven by tax expense in foreign locations, withholding taxes paid on payments made to the U.S. from foreign sources, and tax amortization on indefinite-lived intangibles. Autodesk regularly assesses the need for a valuation allowance against its deferred tax assets. In making that assessment, Autodesk considers both positive and negative evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance in the U.S., Autodesk considered cumulative losses in the U.S. arising from the Company's business model transition as a significant piece of negative evidence. Consequently, in our fiscal year 2016, Autodesk determined that a valuation allowance was required on our accumulated domestic tax attributes. In the current year, losses generated in the U.S. created incremental deferred tax assets, primarily net operating losses and R&D credits, and those deferred tax attributes have also been offset by a full valuation allowance. As a result, Autodesk has no material federal income tax expense or benefit in the current fiscal year. The valuation allowance increased by $352.4 million, $327.2 million, and $3.6 million in fiscal 2017, 2016, and 2015, respectively, primarily related to U.S. and Canadian deferred tax attribute. As Autodesk continually strives to optimize our overall business model, tax planning strategies may become feasible and prudent allowing us to realize many of the deferred tax assets that are offset by a valuation allowance; therefore, Autodesk will continue to evaluate our ability to utilize our net deferred tax assets each quarter, both in the U.S. and in foreign jurisdictions, based on all available evidence, both positive and negative. In the second quarter of this fiscal 2017, Autodesk adopted ASU 2016-9 and recorded on our balance sheet U.S. deferred tax assets related to stock-based compensation that were not recorded on the balance sheet until they reduced Autodesk’s current tax expense. Under ASU 2016-9, those federal and state deferred tax assets were recorded on Autodesk’s balance sheet in the second quarter of fiscal 2017 and consequently increased our valuation allowance by an equivalent amount. See Part II, Item 8, Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements for the impact on the valuation allowance as a result of the adoption in the rate reconciliation above. Realization of foreign non-current net deferred tax assets of $49.7 million is dependent upon the Company's ability to generate future taxable income in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credits. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are reduced and Autodesk then determines that it is not more likely than not to realize such deferred tax assets. As of January 31, 2017, Autodesk had $575.0 million of cumulative federal tax loss carryforwards and $526.8 million of cumulative state tax loss carryforwards, which may be available to reduce future income tax liabilities in federal and state jurisdictions. As discussed above, these cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely that not that these losses will not be utilized. These federal and state tax loss carryforwards will expire beginning fiscal 2019 through fiscal 2038 and fiscal 2019 through fiscal 2038, respectively. As of January 31, 2017, Autodesk had $127.1 million of cumulative federal research tax credit carryforwards, $66.8 million of cumulative California state research tax credit carryforwards, and $54.6 million of cumulative Canadian federal tax credit carryforwards, which may be available to reduce future income tax liabilities in the respective jurisdictions. The federal tax credit carryforwards will expire beginning fiscal 2021 through fiscal 2038, the state credit carryforwards may reduce future California income tax liabilities indefinitely, and the Canadian tax credit carryforwards will expire beginning fiscal 2027 through fiscal 2038. Autodesk also has $211.5 million of cumulative foreign tax credit carryforwards, which may be available to reduce future U. S. tax liabilities. The foreign tax credit will expire beginning fiscal 2019 through fiscal 2028. As discussed above, these cumulative assets have full valuation allowance against them on our balance sheet as the Company has determined it is more likely that not that these losses will not be utilized. Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code and similar state provisions. This annual limitation may result in the expiration of net operating losses and credits before utilization. No ownership change has occurred through the balance sheet date that would limit a material amount of U.S. federal and state tax attributes. As of January 31, 2017, the Company had $261.4 million of gross unrecognized tax benefits, of which $247.3 million would impact the effective tax rate, if recognized. However, this rate impact would be offset to the extent that recognition of unrecognized tax benefits currently presented as a reduction of deferred tax assets would increase the valuation allowance. It is possible that the amount of unrecognized tax benefits will change in the next twelve months; however an estimate of the range of the possible change cannot be made at this time. A reconciliation of the beginning and ending amount of the gross unrecognized tax benefits is as follows:
| Fiscal Year Ended January 31,
| 2017 |  | 2016 |  | 2015
Gross unrecognized tax benefits at the beginning of the fiscal year | $ | 254.3 |  |  | $ | 245.8 |  |  | $ | 222.1 |
Increases for tax positions of prior years | 11.9 |  |  | 1.4 |  |  | 3.2 |
Decreases for tax positions of prior years | (4.1 | ) |  | (7.0 | ) |  | (2.5 | )
Increases for tax positions related to the current year | 11.1 |  |  | 15.8 |  |  | 33.2 |
Decreases relating to settlements with taxing authorities | (10.8 | ) |  | (0.5 | ) |  | (5.4 | )
Reductions as a result of lapse of the statute of limitations | (1.0 | ) |  | (1.2 | ) |  | (4.8 | )
Gross unrecognized tax benefits at the end of the fiscal year | $ | 261.4 |  |  | $ | 254.3 |  |  | $ | 245.8 |
It is the Company's continuing practice to recognize interest and/or penalties related to income tax matters in income tax expense. Autodesk had $2.5 million, $3.3 million, and $2.0 million, net of tax benefit, accrued for interest and penalties related to unrecognized tax benefits as of January 31, 2017, 2016, and 2015, respectively. There was $1.5 million and, $1.3 million of net expense and, $(0.8) million of net benefit for interest and penalties related to tax matters recorded through the consolidated statement of operations for the years ended January 31, 2017, 2016, and 2015 respectively. Autodesk's U.S. and state income tax returns for fiscal year 2003 through fiscal year 2017 remain open to examination. The Internal Revenue Service has started an examination of the Company's U.S. consolidated federal income tax returns and employment tax for fiscal years 2014 and 2015. While it is possible that the Company's tax positions may be challenged, the Company believes its positions are consistent with the tax law, and the balance sheet reflects appropriate liabilities for uncertain federal tax positions for the years being examined. Autodesk files tax returns in multiple foreign taxing jurisdictions with open tax years ranging from fiscal year 2005 to 2017. Autodesk provides U.S. income taxes on the earnings of foreign subsidiaries, except to the extent subsidiaries' earnings are considered permanently reinvested outside the United States. As of January 31, 2017, the cumulative amount of earnings upon which U.S. income taxes have not been provided was $1,738.9 million. The unrecognized deferred tax liability for these earnings was approximately $435.1 million. As a result of certain business and employment actions and capital investments undertaken by Autodesk, income earned in certain Europe and Asia Pacific countries is subject to reduced tax rates through fiscal 2019. We have $27.1 million benefit ($0.12 basic net income per share) attributable to the tax status of these business arrangements in fiscal 2017, compared to none in fiscal 2016, and $1.2 million ($0.01 basic net income per share) in fiscal 2015.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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