Salesforce.com 2008 Annual Report Download - page 65

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Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements
1. Summary of Business and Significant Accounting Policies
Description of Business
Salesforce.com, inc. (the "Company") is the leading provider, based on revenue and market share, of software on demand, according to a July 2008
report by International Data Corporation. The Company provides a comprehensive customer relationship management ("CRM") service to businesses of all
sizes and industries worldwide and provides a technology platform for customers and developers to build and run applications. The Company offers its
services on a subscription basis.
Fiscal Year
The Company's fiscal year ends on January 31. References to fiscal 2009, for example, refer to the fiscal year ending January 31, 2009.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Company's
consolidated financial statements and notes thereto.
Significant estimates and assumptions made by management include the determination of the provision for income taxes, whether an other-than-
temporary decline has occurred in the fair value of certain investments in marketable securities, the fair value of stock awards issued and the allocation of the
purchase price paid for acquisitions. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation. Additionally, the Company holds a majority interest in Kabushiki Kaisha salesforce.com ("Salesforce
Japan"), a Japanese joint venture. As of January 31, 2009, the Company owned a 72 percent interest in the joint venture. Given the Company's majority
ownership interest in the joint venture, the accounts of the joint venture have been consolidated with the accounts of the Company, and a minority interest has
been recorded for the minority investors' interests in the net assets and operations of the joint venture to the extent of the minority investors' individual
investments.
Segments
The Company operates in one segment.
Foreign Currency Translation
The functional currency of the Company's major foreign subsidiaries is generally the local currency. For example, the functional currency for the
Company's subsidiaries in Europe is the Euro. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are
recorded as part of a separate component of stockholders' equity. Foreign currency transaction gains and losses are included in net income for the period. All
assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses
are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates.
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