Salesforce.com 2016 Annual Report Download - page 105
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The following table sets forth the components of identifiable intangible assets acquired (in thousands) and
their estimated useful lives as of the date of acquisition:
Fair
Value Useful Life
Developed technology ..................... $14,470 7 years
Customer relationships and other purchased
intangible assets ........................ 1,730 1-3 years
Total .................................. $16,200
The amount recorded for developed technology represents the estimated fair value of RelateIQ’s
relationship intelligence technology. The amount recorded for customer relationships represent the fair values of
the underlying relationships with RelateIQ customers. The goodwill balance is primarily attributed to the
assembled workforce and expanded market opportunities when integrating RelateIQ’s relationship intelligence
technology with the Company’s other offerings. The goodwill balance is not deductible for U.S. income tax
purposes.
The Company assumed unvested equity awards for shares of RelateIQ’s common stock with a fair value of
$33.9 million. Of the total consideration, $1.1 million was allocated to the purchase consideration and
$32.8 million was allocated to future services and will be expensed over the remaining service periods on a
straight-line basis.
Goodwill
Goodwill represents the excess of the purchase price in a business combination over the fair value of net
tangible and intangible assets acquired. Goodwill amounts are not amortized, but rather tested for impairment at
least annually during the fourth quarter.
Goodwill consisted of the following (in thousands):
Balance as of January 31, 2014 ...................... $3,500,823
RelateIQ ................................... 289,857
Finalization of acquisition date fair values ......... (8,020)
Balance as of January 31, 2015 ...................... 3,782,660
Other acquisitions ............................ 68,655
Finalization of acquisition date fair values ......... (1,378)
Balance as of January 31, 2016 ...................... $3,849,937
There was no impairment of goodwill during fiscal 2016, 2015 or 2014.
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