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Table of Contents
ORACLE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2008
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Oracle Corporation develops, manufactures, markets, distributes and services database and middleware software, as
well as applications software, that help organizations manage and grow their businesses. Database and middleware
software is used for the secure storage, retrieval and manipulation of all forms of software-based data, and for
developing and deploying applications on the internet and on corporate intranets. Applications software is used to
automate business processes and to provide business intelligence. We also offer software license updates and product
support (including support for the Linux Operating System), and other services including consulting, On Demand,
and education.
Oracle Corporation is a holding corporation with ownership of its direct and indirect subsidiaries, which include
Oracle Systems Corporation (Old Oracle), Siebel Systems, Inc. (Siebel) and each of their domestic and foreign
subsidiaries around the world. Oracle Corporation, or Oracle, was initially formed as a direct wholly-owned
subsidiary of Old Oracle. Prior to January 31, 2006, our name was Ozark Holding Inc. and Old Oracle’s name was
Oracle Corporation. On January 31, 2006, in connection with the acquisition of Siebel, which is described in Note 2,
a wholly-owned subsidiary of Oracle was merged with and into Old Oracle, with Old Oracle surviving as a
wholly-owned subsidiary of Oracle (the Reorganization). In addition, another wholly-owned subsidiary of Oracle
was merged with and into Siebel, with Siebel surviving as a wholly-owned subsidiary of Oracle. As a result, Oracle
became the parent company of Old Oracle and Siebel, and the changes to the names of Oracle and Old Oracle were
effected.
Basis of Financial Statements
The consolidated financial statements include our accounts and the accounts of our wholly- and majority-owned
subsidiaries. We consolidate all of our majority-owned subsidiaries and reflect as minority interests the portions of
these entities that we do not own in other long-term liabilities on our consolidated balance sheets. At May 31, 2008
and 2007, the balance of minority interests was $369 million and $316 million, respectively. Intercompany
transactions and balances have been eliminated. The presentation of certain prior year balances has been reclassified
to conform to the current year presentation. Such reclassifications did not affect total revenues, operating income or
net income.
Use of Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles
(GAAP). These accounting principles require us to make certain estimates, judgments and assumptions. We believe
that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available
to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and
assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well
as the reported amounts of revenues and expenses during the periods presented. To the extent there are material
differences between these estimates, judgments or assumptions and actual results, our consolidated financial
statements will be affected. In many cases, the accounting treatment of a particular transaction is specifically dictated
by GAAP and does not require management’s judgment in its application. There are also areas in which
management’s judgment in selecting among available alternatives would not produce a materially different result.
Revenue Recognition
We derive revenues from the following sources: (1) software, which includes new software license and software
license updates and product support revenues, and (2) services, which include consulting, On Demand and education
revenues.
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Source: ORACLE CORP, 10-K, July 02, 2008 Powered by Morningstar® Document Research℠