Salesforce.com 2014 Annual Report Download - page 73

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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 provider of enterprise cloud computing services. The Company is
dedicated to helping customers of all sizes and industries worldwide transform themselves into “customer
companies” by empowering them to connect with their customers in entirely new ways. With four core service
offerings, the Sales Cloud, the Service Cloud, the Marketing Cloud and the Salesforce1 Platform, the Company
provides a next generation customer platform.
Fiscal Year
The Company’s fiscal year ends on January 31. References to fiscal 2014, for example, refer to the fiscal
year ending January 31, 2014.
Basis of Presentation
On March 20, 2013, the Company’s certificate of incorporation was amended to increase the number of
authorized shares of common stock from 400.0 million to 1.6 billion in order to provide for a four-for-one stock
split of the common stock effected in the form of a stock dividend. The record date for the stock split was
April 3, 2013, and the additional shares were distributed on April 17, 2013. Each stockholder of record on the
close of business on the record date received three additional shares of common stock for each share held. All
share and per share data presented herein reflect the impact of the increase in authorized shares and the stock
split, as appropriate.
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 best estimate of selling price of the deliverables included in multiple-deliverable revenue
arrangements,
• the fair value of assets acquired and liabilities assumed for business combinations,
• the recognition, measurement and valuation of current and deferred income taxes,
• the recognition and measurement of loss contingencies,
• the estimate of real estate sublease rental rates and market conditions,
• the fair value of the convertible notes,
• the fair value of stock awards issued and related forfeiture rates,
• the valuation of strategic investments and the determination of other-than-temporary impairments, and
• the assessment of recoverability of long-lived assets (property and equipment, goodwill and identified
intangibles).
Actual results could differ materially from those estimates.
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