Support.com 2007 Annual Report Download - page 57

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SUPPORTSOFT, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization and Summary of Significant Accounting Policies
Nature of Operations
SupportSoft, Inc. ("SupportSoft," "the Company," "We" or "Our"), was incorporated in the state of Delaware on December 3, 1997. SupportSoft provides
software and services designed to make technology work. Our enterprise customers use our software to resolve technical problems for their customers efficiently
and effectively, thereby improving customer satisfaction and reducing technical support costs. In addition to our enterprise solutions, we now provide premium
technology support to consumers over the phone and the internet for a fee.
Our headquarters is located in Redwood City, California and we maintain offices in several other cities in the United States. We have international
operations in several countries.
Basis of Presentation
The consolidated financial statements include the accounts of SupportSoft and its wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.
Foreign Currency Translation
The functional currency of the Company's foreign subsidiaries is generally the local currency. Assets and liabilities of SupportSoft's wholly-owned foreign
subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenues and expenses are
translated at average exchange rates prevailing during the year. Any material resulting translation adjustments are reflected as a separate component of
stockholders' equity in accumulated other comprehensive income or loss. Realized foreign currency transaction gains and losses were not material during the
years ending December 31, 2007, 2006, and 2005.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ materially from
these estimates.
Reclassifications
Certain amounts in the Consolidated Financial Statements and Notes to Consolidated Financial Statements for prior years have been reclassified to conform
to current year's presentation. Net operating results have not been affected by these reclassifications.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities and trade
accounts receivable. Our investment portfolio consists of investment grade securities. Except for obligations of the United States government and securities
issued by agencies of the United States government, we diversify our investments by limiting our holdings with any individual issuer. We also limit the amount
of credit risk exposure to any one country except the United States. We are exposed to credit risks in the event of default by the issuers to the extent of the
amount recorded on the balance sheet. The credit risk in our trade accounts
53
Source: SUPPORTSOFT INC, 10-K, March 13, 2008