Blackberry 1998 Annual Report Download - page 24

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Nature of Business
The company is in the business of developing, manufacturing and supplying radios and other network
access devices for use in wireless data communications systems. The company was incorporated on March
7, 1984 under the Ontario Business Corporations Act.
1. Amalgamation
On October 27, 1997 the company amalgamated with a holding company which was formed as a result of
the amalgamation of certain other holding companies (collectively, the “Holdcos”). The Holdcos’ sole assets
prior to the amalgamations were shares of the company. The Holdcos had no liabilities. The shareholders of
the Holdcos received upon amalgamation, shares of the amalgamated company equal to the number of
shares of the company previously owned by their respective Holdco.
2. Summary of Significant Accounting Policies
(a) General
These financial statements have been prepared by management in accordance with generally accepted
accounting principles on a basis consistent with prior years. Because a precise determination of assets and
liabilities depends on future events, the preparation of financial statements for a period necessarily involves
the use of estimates and approximation. Actual amounts may differ from these estimates. These financial
statements have, in management’s opinion, been properly prepared within reasonable limits of materiality
and within the framework of the accounting policies summarized below.
(b) Financial instruments
Short-term investments include those financial instruments which mature within one year or which
management intends to convert to cash within one year of the date of purchase. Marketable shares and
bonds which may be included are subject to market risk in that their value will fluctuate as a result of
changes in market prices.
The fair value of financial instruments approximates amounts recorded. A significant portion of the
company’s sales and purchases are transacted with companies outside Canada. As a result, the company is
exposed to risks relating to foreign exchange fluctuations. The company mitigates this risk by maintaining
currency in foreign funds.
(c) Inventory
Inventory of raw materials and work in process is stated at the lower of cost and net realizable value, with
cost determined on a first-in-first-out basis.
(d) Capital assets
Capital assets are stated at cost and amortization is provided using the following methods:
Furniture, fixtures, tooling and equipment - 20% per annum on the declining balance;
Computer equipment - straight-line over five years;
Patents - straight-line over seventeen years;
Leasehold improvements - straight-line over five years;
Pre-production costs - straight-line over five years.
Amortization is recorded from the date of acquisition.
Notes to Financial Statements February 28, 1998