Goodwill

The following table summarizes the changes in the carrying amount of goodwill for the periods ended October 31, 2016 and January 31, 2016:



	October 31, 2016			January 31, 2016
Goodwill, beginning of the period	$	1,684.2		$	1,605.4
Less: accumulated impairment losses, beginning of the period	(149.2		)	(149.2		)
Additions arising from acquisitions during the period	62.8			97.3
Effect of foreign currency translation, purchase accounting adjustments, and other	(40.5		)	(18.5		)
Goodwill, end of the period	$	1,557.3		$	1,535.0

Goodwill consists of the excess of consideration transferred over the fair value of net assets acquired in business combinations. Autodesk tests goodwill for impairment annually in its fourth fiscal quarter or more often if circumstances indicate a potential impairment may exist, or if events have affected the composition of reporting units.

When goodwill is assessed for impairment, 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 used 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 the fair value of the reporting unit is greater than its carrying value, then performing the two-step impairment test is unnecessary.

Therefore, the two-step quantitative impairment test is necessary when either Autodesk does not use the optional assessment or, as a result of the optional assessment, it is not more likely than not that the fair value of the reporting unit is greater than its carrying value. In performing the two-step impairment test, Autodesk uses discounted cash flow models which include assumptions regarding projected cash flows. Variances in these assumptions could have a significant impact on Autodesk's conclusion as to whether goodwill is impaired, or the amount of any impairment charge. Impairment charges, if any, result from instances where the fair values of net assets associated with goodwill are less than their carrying values. As changes in business conditions and assumptions occur, Autodesk may be required to record impairment charges. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. The value of Autodesk’s goodwill could also be impacted by future adverse changes such as: (i) declines in Autodesk’s actual financial results, (ii) a sustained decline in Autodesk’s market capitalization, (iii) significant slowdown in the worldwide economy or the industries Autodesk serves, or (iv) changes in Autodesk’s business strategy or internal financial results forecasts.

As described in Note 18, "Segments," commencing in the third quarter of fiscal 2017, Autodesk changed its segment reporting as it now operates as a single operating segment and single reporting unit. We were required to conduct impairment tests immediately before and after the change in the composition of our reporting units.

Accordingly, for the "before" test, we assessed goodwill for impairment during the third quarter of fiscal 2017 using the two-step quantitative test for each of our legacy reporting units: PSEB, MFG, AEC, M&E, and Delcam -- a component of our MFG operating segment. In performing the quantitative two-step test, Autodesk used a discounted cash flow model which included assumptions regarding projected cash flows. Based on this testing, Autodesk determined that the fair value was in excess of the carrying value for each of the five reporting units and therefore the goodwill of each reporting unit was not impaired during the quarter ended October 31, 2016.

As part of the "after" test, in situations in which an entity's reporting unit is publicly traded, the fair value of the Company may be approximated by its market capitalization. The market capitalization of the Company is in excess of the carrying value of its reporting unit as of October 31, 2016. The Company determined that there were no indicators of impairment as of October 31, 2016.