Salesforce.com 2012 Annual Report Download - page 71

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 (loss) 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.
Concentrations of Credit Risk and Significant Customers
The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of
cash and cash equivalents, marketable securities and trade accounts receivable. Although the Company deposits
its cash with multiple financial institutions, its deposits, at times, may exceed federally insured limits. Collateral
is not required for accounts receivable. The Company maintains an allowance for doubtful accounts receivable
balances. The allowance is based upon historical loss patterns, the number of days that billings are past due and
an evaluation of the potential risk of loss associated with delinquent accounts.
One customer accounted for 6 percent of accounts receivable at January 31, 2012 and no single customer
accounted for more than 5 percent of accounts receivable at January 31, 2011. No single customer accounted for
5 percent or more of total revenue during fiscal 2012, 2011, and 2010.
As of January 31, 2012 and 2011, assets located outside the Americas were 13 percent and 16 percent of
total assets, respectively.
Revenues by geographical region are as follows (in thousands):
Fiscal Year Ended January 31,
2012 2011 2010
Revenues by geography:
Americas ....................................... $1,540,289 $1,135,019 $ 923,823
Europe ......................................... 408,456 291,784 232,367
Asia Pacific ..................................... 317,794 230,336 149,393
$2,266,539 $1,657,139 $1,305,583
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months
or less to be cash equivalents. Cash and cash equivalents are stated at fair value.
Marketable Securities
Management determines the appropriate classification of marketable securities at the time of purchase and
reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are
carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of
stockholders’ equity. Fair value is determined based on quoted market rates when observable or utilizing data
points that are observable, such as quoted prices, interest rates and yield curves. Declines in fair value judged to
be other-than-temporary on securities available for sale are included as a component of investment income. In
order to determine whether a decline in value is other-than-temporary, the Company evaluates, among other
factors: the duration and extent to which the fair value has been less than the carrying value and its intent and
ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair market
value. The cost of securities sold is based on the specific-identification method. Interest on securities classified as
available for sale is also included as a component of investment income.
67