Salesforce.com 2007 Annual Report Download - page 61

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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 the leading provider, based on revenue and market share, of software on demand, according to a July 2007
report by International Data Corporation. It provides a comprehensive customer relationship management ("CRM") service to businesses of all sizes and
industries worldwide. The Company began to offer its on-demand application service on a subscription basis in February 2000. The Company conducts its
business worldwide.
Fiscal Year
The Company's fiscal year ends on January 31. References to fiscal 2008, for example, refer to the fiscal year ending January 31, 2008.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles, or 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 and the fair value of stock
awards issued. 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. Additionally, the Company holds a majority interest in Kabushiki Kaisha salesforce.com ("Salesforce
Japan"), a Japanese joint venture. As of January 31, 2008, the Company owned a 65 percent interest in the joint venture. Given the Company's majority
ownership interest in the joint venture, the accounts of the joint venture have been consolidated with the accounts of the Company, and a minority interest has
been recorded for the minority investors' interests in the net assets and operations of the joint venture to the extent of the minority investors' individual
investments. Additionally, the Company records gains and losses resulting from the change of interest in Salesforce Japan directly to stockholders' equity as
additional paid-in capital.
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 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.
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