Salesforce.com 2012 Annual Report Download - page 82

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Warranties and Indemnification
The Company’s enterprise cloud computing services are typically warranted to perform in a manner
consistent with general industry standards that are reasonably applicable and materially in accordance with the
Company’s online help documentation under normal use and circumstances.
The Company’s arrangements generally include certain provisions for indemnifying customers against
liabilities if its products or services infringe a third-party’s intellectual property rights. To date, the Company has
not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such
obligations in the accompanying consolidated financial statements.
The Company has also agreed to indemnify its directors and executive officers for costs associated with any
fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or
proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service
as a director or officer, including any action by the Company, arising out of that person’s services as the
Company’s director or officer or that person’s services provided to any other company or enterprise at the
Company’s request. The Company maintains director and officer insurance coverage that would generally enable
the Company to recover a portion of any future amounts paid. The Company may also be subject to
indemnification obligations by law with respect to the actions of its employees under certain circumstances and
in certain jurisdictions.
Advertising Expenses
Advertising is expensed as incurred. Advertising expense was $80.3 million, $61.4 million and $50.8
million for fiscal 2012, 2011 and 2010, respectively.
Subsequent Events
The Company evaluated subsequent events through the date this Annual Report on Form 10-K was filed
with the SEC.
New Accounting Pronouncements
In December 2010, the FASB issued Accounting Standards Update No. 2010-29, Disclosure of
Supplementary Pro Forma Information for Business Combinations (Topic 805)—Business Combinations
(“ASU 2010-29”), to improve consistency in how the pro forma disclosures are calculated. Additionally, ASU
2010-29 enhances the disclosure requirements and requires description of the nature and amount of any material,
nonrecurring pro forma adjustments directly attributable to a business combination. ASU 2010-29 is effective for
the Company in fiscal 2013 and should be applied prospectively to business combinations for which the
acquisition date is after the effective date. The Company does not believe the impact of the pending adoption of
ASU 2010-29 will have a significant effect on the consolidated financial statements.
In June 2011, the FASB issued Accounting Standards Update No. 2011-05, Comprehensive Income (Topic
220)—Presentation of Comprehensive Income (“ASU 2011-05”), to require an entity to present the total of
comprehensive income, the components of net income, and the components of other comprehensive income
either in a single continuous statement of comprehensive income or in two separate but consecutive statements.
ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the
statement of equity. ASU 2011-05 is effective for the Company in fiscal 2013 and should be applied
retrospectively. The Company does not believe the impact of the pending adoption of ASU 2011-05 will have a
significant effect on the consolidated financial statements.
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