In mid-2013, Salesforce.com, Inc., a global leader in CRM (customer relationship management) services, acquired all of the outstanding stock of ExactTarget, a global provider of digital marketing technology. Acquisition cost consisted of the following (in thousands):

Salesforce.com assumed outstanding stock options and restricted stock related to ExactTarget’s employees, with an estimated fair value of \($102.2\) million, by converting the awards into Salesforce.com stock using a share conversion ratio of 0.84. Of this amount, \($17.428\) million was included in acquisition cost.
The equity awards assumed represents conversion of ExactTarget’s outstanding stock options to equity awards in Salesforce.com stock.
The following schedule lists the fair values of ExactTarget’s identifiable net assets (in thousands):

Identifiable intangibles, all amortizable, consist of the following (in thousands):

The deferred tax liability is primarily the result of the difference between book and tax basis of identifiable intangible assets. Salesforce.com's fiscal year ends January 31. 

Required

a. How do you think Salesforce.com determined the fair value of equity awards assumed?

b. How did Salesforce.com determine which portion of the \($102.2\) million in equity awards assumed was included in acquisition cost? What is the difference in reporting for the two portions of assumed equity awards?

c. Explain the nature of the deferred tax liability that is included in liabilities assumed.

d. Salesforce.com made other acquisitions in fiscal 2014, but its acquisition of ExactTarget was by far the largest. In its annual report footnotes, Salesforce.com disclosed that "finalization of acquisition date fair values" resulted in a \($5,019,000\) reduction in goodwill in fiscal 2014. Speculate on the rea- sons why goodwill was reduced in fiscal 2014.

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Cash.. $2,567,098 Fair value of equity awards assumed. 17,428 Total.. $2,584,526