Salesforce.com 2010 Annual Report Download - page 63

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 a leading provider of enterprise cloud computing applications. The Company provides a comprehensive
customer and collaboration 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 2011, for example, refer to the fiscal year ending January 31, 2011.
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, the fair value of stock awards
issued, and the determination of the fair value of assets acquired and liabilities assumed for business 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.
In December 2000, the Company established a Japanese joint venture, Kabushiki Kaisha salesforce.com ("Salesforce Japan"), with SunBridge, Inc., a
Japanese corporation, to assist the Company with its sales efforts in Japan. During fiscal 2011, the Company acquired SunBridge's and other shareholders'
interest in Salesforce Japan, and increased the Company's ownership from 72 percent to 100 percent.
As the Company did not obtain 100 percent ownership until the fourth quarter of fiscal 2011, the Company recorded a noncontrolling interest in the
consolidated statement of operations for the noncontrolling investors' interests in the net assets and operations of the Salesforce Japan. Noncontrolling interest
of $0 and $12.9 million as of January 31, 2011 and 2010 is reflected in stockholders' equity, respectively.
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. 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
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