Salesforce.com 2009 Annual Report Download - page 70

Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements—(Continued)
When assets are retired, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such
retirement is reflected in operating expenses. When assets are otherwise disposed of, the cost and related accumulated depreciation and amortization are
removed from their respective accounts and any gain or loss on such sale or disposal is reflected in other income.
Impairment of Long-Lived Assets
The Company evaluates the recoverability of its long-lived assets for possible impairment whenever events or circumstances indicate that the carrying
amount of such assets may not be recoverable. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of
such assets is reduced to fair value.
There was no impairment of long-lived assets during fiscal 2010, 2009 and 2008.
The Company evaluates and tests the recoverability of the goodwill for impairment annually in the fourth quarter or more often if and when
circumstances indicate that goodwill may not be recoverable. There was no impairment of goodwill during fiscal 2010 and 2009 and 2008.
Capitalized Software Costs
For its website development costs and the development costs related to its enterprise cloud computing application service, the company capitalizes costs
incurred during the application development stage. Costs related to preliminary project activities and post implementation activities were expensed as
incurred. Internal use software is amortized on a straight line basis over its estimated useful life, generally three years. Management evaluates the useful lives
of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these
assets.
The Company capitalized $15.1, million $10.2 million and $11.1 million of costs during fiscal 2010, 2009 and 2008, respectively. Amortization
expense totaled $9.9 million, $6.6 million, and $2.7 million during fiscal 2010, 2009 and 2008, respectively.
Comprehensive Income
Comprehensive income consists of net income and accumulated other comprehensive income, which includes certain changes in equity that are
excluded from net income. Specifically, cumulative foreign currency translation adjustments and unrealized gains and losses on marketable securities, net of
taxes of $3.9 million in fiscal 2010 and $0.6 million in fiscal 2009, are included in accumulated other comprehensive income. Accumulated other
comprehensive loss has been reflected in stockholders' equity.
The components of accumulated other comprehensive loss were as follows (in thousands):
As of January 31,
2010 2009
Foreign currency translation and other adjustments $ (7,066) $ (3,957)
Net unrealized gain on marketable securities 5,636 1,052
$ (1,430) $ (2,905)
67