Salesforce.com 2015 Annual Report Download - page 86

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Fair Value Measurement
The Company measures its cash equivalents, marketable securities and foreign currency derivative contracts
at fair value.
The additional disclosures regarding the Company’s fair value measurements are included in Note 2
“Investments”.
Property and Equipment
Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the
estimated useful lives of those assets as follows:
Computer, equipment and
software ..................... 3to9years
Furniture and fixtures ............. 5years
Leasehold improvements .......... Shorter of the estimated lease term
or 10 years
Building improvements ........... Amortized over the estimated useful
lives of the respective assets when
they are ready for their intended use
When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization
are removed from their respective accounts and any loss on such retirement is reflected in operating expenses.
Capitalized Internal-Use Software Costs
The Company capitalizes costs related to its enterprise cloud computing services and certain projects for
internal use incurred during the application development stage. Costs related to preliminary project activities and
post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line
basis over its estimated useful life, which is generally three to five years. Management evaluates the useful lives
of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur
that could impact the recoverability of these assets.
Goodwill, Intangible Assets, Long-Lived Assets and Impairment Assessments
The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during
the fourth quarter or more often if and when circumstances indicate that goodwill may not be recoverable.
Intangible assets are amortized over their useful lives. Each period the Company evaluates the estimated
remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to
the remaining period of amortization. The carrying amounts of these assets are periodically reviewed for
impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not
be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to
the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the
test for recoverability are less than the carrying amount of these assets, then the carrying amount of such assets is
reduced to fair value.
The Company evaluates the recoverability of its long-lived assets for possible impairment whenever events
or circumstances indicate that the carrying amount of such assets may not be recoverable. If such review
indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is
reduced to fair value.
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