Support.com 2006 Annual Report Download - page 51

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SUPPORTSOFT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization and Summary of Significant Accounting Policies
Nature of Operations
SupportSoft, Inc. (“SupportSoft,” “the Company,” “We” or “Our”), was incorporated in the state of Delaware on December 3,
1997. We are a leading provider of software and services that automate the resolution of technology problems. Our solutions reduce
technology support costs, improve customer satisfaction and enable new revenue streams for organizations worldwide. We recently
expanded our offerings and now provides technology support directly to consumers.
Our headquarters is located in Redwood City, California and we maintain offices in several other cities in the United States. We
have international operations in several countries around the world.
Basis of Presentation
The consolidated financial statements include the accounts of SupportSoft and its wholly−owned subsidiaries. SupportSoft has
export sales from the United States and has operations in India, Canada, Europe and the Asia/Pacific region. All significant
intercompany transactions and balances have been eliminated.
Acquisition
On September 2, 2004, the Company acquired substantially all the assets and certain liabilities of Core Networks Incorporated
(“Core Networks”). The acquisition was accounted for as a purchase and the operating results have been included in our consolidated
financial statements since the date of acquisition.
Foreign Currency Translation
Assets and liabilities of SupportSoft’s wholly−owned foreign subsidiaries are translated from their respective functional currencies
at exchange rates in effect at the balance sheet date, and revenues and expenses are translated at average exchange rates prevailing
during the year. Any material resulting translation adjustments are reflected as a separate component of stockholders’ equity in
accumulated other comprehensive income or loss. Realized foreign currency transaction gains and losses were not material during the
years ending December 31, 2006, 2005, and 2004.
Use of Estimates and Reclassifications
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the
accompanying notes. Actual results could differ materially from these estimates. The Company has made certain reclassifications to
conform to current year’s presentation.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable
securities and trade accounts receivable. Our investment portfolio is diversified and consists of investment grade securities. Our
investment policy limits the amount of credit risk exposure to any one issuer and in any one country except the United States. We are
exposed to credit
47
Source: SUPPORTSOFT INC, 10−K, March 16, 2007