Salesforce.com 2007 Annual Report Download - page 72

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Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements—(Continued)
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
As of January 31,
2008 2007
Deferred professional services costs $ 9,376 $ 3,898
Prepaid expenses and other current assets 17,679 11,781
$ 27,055 $ 15,679
Fixed Assets
Fixed assets consisted of the following (in thousands):
As of January 31,
2008 2007
Computers, equipment and software $ 34,197 $ 29,440
Furniture and fixtures 8,354 3,866
Leasehold improvements 36,279 20,757
78,830 54,063
Less accumulated depreciation and amortization (37,450) (23,908)
$ 41,380 $ 30,155
Depreciation and amortization expense totaled $16,835,000, $9,928,000 and $5,584,000 during fiscal 2008, 2007 and 2006, respectively.
Fixed assets at January 31, 2008 and January 31, 2007 included a total of $3,627,000 acquired under capital lease agreements. Accumulated
amortization relating to equipment and software under capital leases totaled $3,619,000 and $3,364,000, respectively, at January 31, 2008 and January 31,
2007. Amortization of assets under capital leases is included in depreciation and amortization expense.
Capitalized Software
Capitalized software consisted of the following (in thousands):
As of January 31,
2008 2007
Capitalized internal-use software development costs, net of accumulated amortization of $4,898 and $2,150, respectively $ 13,932 $ 5,626
Acquired developed technology, net of accumulated amortization of $6,542 and $1,653, respectively 9,129 5,357
$ 23,061 $ 10,983
In March 2007, the Company acquired 100 percent of the outstanding stock of a corporation, whose principal asset was developed technology, for $5.3
million in cash. The Company accounted for this acquisition as a capital expenditure as the acquired entity did not meet the accounting definition of a
business. As part of the acquisition accounting, the Company recorded a $3.4 million deferred income tax liability to reflect the tax effect of the difference
between the $5.3 million in cash paid and the tax basis of the technology acquired.
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