SecProbe.io

September 30 , 2014

Via E -mail
Frank H. Brod
Corporate Vice President, Finance and Administration
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052 -6399

Re: Microsoft Corporation
 Form 10 -K for the Fiscal Year Ended June 30, 2014
Filed July 3 1, 2014
File No. 000 -14278

Dear Mr. Brod:

We have reviewed your filing and  have the following comments.  Comments, if any,
related to disclosure in Part III of your Form 10-K, will be provided under separate cover after it
has been filed.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.

Please respond to this letter within ten business days by amending yo ur filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why i n your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have additional comments.

General

1. You told us in your letter dated January 10, 2012 that you provided cert ain software and
services to Cuba and Sudan.   Also, you told us in your letter dated February 2, 2012 that
you intended to sell certain software into Syria by September 2013.   It appears from your
website that Microsoft Lebanon SARL continues to provide su pport services for
Syria.   In addition, you state on page 6 that your phones are “being tailored for virtually
every demographic and geography worldwide.”   Cuba, Sudan and Syria are designated as
state sponsors of terrorism by the State Department and are subject to U.S. economic
sanctions and export controls.   You do not include disclosure in the Form 10 -K about any
contacts with Cuba, Sudan or Syria.   Please provide us with information regarding your
contacts with Cuba, Sudan and Syria since the reference d letters.   You should describe
any products, software, technology or services you have provided into Cuba, Sudan and

Frank H. Brod
Microsoft Corporation
September 30 , 2014
Page 2

 Syria, directly or indirectly, and any agreements, arrangements or other contacts you have
had with the governments of Cuba, Sudan and Syr ia or entities they control.

2. Please discuss the materiality of your contacts with Cuba, Sudan and Syria described in
response to the comment above, and whether they constitute a material investment risk
for your security holders.   You should address mater iality in quantitative terms, including
the approximate dollar amounts of any revenues, assets and liabilities associated with
Cuba, Sudan and Syria since the referenced letters.   Also, address materiality in terms of
qualitative factors that a reasonable investor would deem important in making an
investment decision, including the potential impact of corporate activities upon a
company’s reputation and share value.   As you know, various state and municipal
governments, universities and other investors have  proposed or adopted divestment or
similar initiatives regarding investment in companies that do business with U.S. -
designated state sponsors of terrorism.   You should address the potential impact of the
investor sentiment evidenced by such actions directe d toward companies that have
operations associated with Cuba, Sudan and Syria.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Segment Results of Operations, page 32

3. In parts of the discussion of your segments , you do not appear to indicate whether the
changes in revenue occurred as a result of changes in prices or volume.  For example and
without limitation, you explain on page 33 under the caption “D&C Other” that the
revenue increase was “offset in part by a 25%  reduction in display advertising revenue ,”
but it is unclear if the decrease was caused by changes in price or volume.  Similarly,
under “Commercial Other” on page 35 , you do not indicate whether the higher revenue
was caused from changes in price or volu me.  Please confirm that you will revise your
disclosure in future filings to clarify whether changes in revenue were as a result of
change in price or volume.  Refer to Item 303(a)(3)(iii) of Regulation S -K.

Application of Critical Accounting Policies

Goodwill,  page 47

4. Tell us and disclose whether the goodwill at the reporting units is at risk of failing step
one of the impairment test.  If a reporting unit is at risk of failing step one of the
impairment test, please identify and provide the following  disclosures for each such
reporting unit in future filings:

a. The percentage by which fair value exceeded carrying value as of the date of the most
recent test;
b. The amount of goodwill allocated to the reporting unit;

Frank H. Brod
Microsoft Corporation
September 30 , 2014
Page 3

 c. A description of the methods and key assumptions used and how the key assumptions
were determined;
d. A discussion of the degree of uncertainty associated with the key assumptions; and
e. A description of potential events and/or changes in circumstances that could
reasonably be expected to negati vely affect the key assumptions.

If the estimated fair values substantially exceed the carrying values of your reporting
units, please consider disclosing this determination in future filings.

Financial Statements and Supplementary Data

Notes to Financi al Statements

Note 5 – Derivatives

Credit -Risk-Related Contingent Features, page 69

5. Tell us what consideration you gave to the disclosure requirements in ASC 815 -10-50-
4H.  In this regard, address what consideration was given to the requirement to disclose
the aggregate fair value amounts of the derivative instruments with credit -risk-related
contingent features that are in a net liability position as well as, if the features were
triggered, the aggregate fair value of the additional assets that wou ld be required to be
posted as collateral and of the assets needed to settle the instrument immediately.

Note 21 – Segment Information and Geographic Data, page 91

6. Please elaborate on the method used to allocate certain revenue to your segments.  In this
regard, describe to us and explain the consideration you gave to disclosing how the
relative value of the underlying products and services is determined in allocating revenue.
Refer to ASC 280 -10-50-29.

7. We note that the revenue from other countries repr esents a material portion of total
revenue for all periods presented, although no country other than the United States
accounted for more than 10%.  Tell us the regions or countries that comprise the category
of other countries, as well as the associated a mount of revenue for each region or country.
Explain what consideration you gave to disclosing any material concentrations in
geographic revenue.  In this regard, we note the risk of regulatory scrutiny in certain
foreign countries and regions disclosed o n page 21.  Refer to ASC 280 -10-50-41 and
ASC 275 -10-50-18(d).

8. We note you disclose your significant products and service offerings in a table.  Tell us
what consideration you gave to separately presenting revenues earned from Microsoft
Office systems and  Windows PC operating systems between Devices & Consumer and

Frank H. Brod
Microsoft Corporation
September 30 , 2014
Page 4

 Commercial.  In addition, we note you disclose the amount of Commercial Cloud
revenue.  Tell us and explain the consideration you gave to disclosing  the amount of
revenue earned from cloud -based offerings within Devices & Consumer in a footnote to
the table.  To the extent significant to the respective product categories in the table, also
tell us what consideration you gave to disclosing the amount of cloud -based revenue
attributable to each cate gory.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since th e company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide a written statement from  the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Melissa Walsh, Staff Accountant, at (202 ) 551 -3224 if you have
questions regarding comments on the financial statements and related matters.  If you have any
other questions, please contact Gabriel Eckstein, Staff Attorney, at (202) 551 -3286 or Matthew
Crispino, Staff Attorney, at (202) 551 -3456 .  If you require further assistance, do not hesitate to
contact me at (202) 551 -3488.

Sincerely,

 /s/ Stephen Krikorian

Stephen Krikorian
Accounting Branch Chief