Blackberry 1998 Annual Report Download - page 28

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26
No portion of the potential benefit of the carryforwards and timing differences has been reflected in
these financial statements except to offset deferred taxes of $1,868,700. Any benefits related to the deduction
of the share issue costs will be credited directly to share capital and a charge will be made to the income tax
provision. Any benefits related to investment tax credits claimed for capital asset acquisitions will be
credited to capital assets. Any other benefits of these carryforwards will be credited to income in the year of
recognition.
The difference between the amount of the provision for income taxes and the amount computed by
multiplying income (loss) before taxes by the statutory rate is reconciled as follows:
For the year ended February 28, 1998 1997
Provision for (recovery of) income taxes based on a
Canadian income tax rate of 44.62% $ 412,837 $ (8,527)
Increase (decrease) in taxes resulting from:
Research and development tax incentives (643,580) (290,315)
Corporate minimum taxes and other 115,836 27,789
Losses not tax effected 500,170 290,315
Non-taxable portion of capital gains ___ (82,109)
$ 385,263 $ (62,847)
9. Lease Commitments
The company is committed to lease payments under operating leases for premises as follows:
For the year ending February 28, 1999 $ 571,000
2000 $ 581,000
2001 $ 457,000
2002 $ 39,000
In addition, the company is also responsible for operating costs on its premises.
10. Contingencies
As at February 28, 1998, the accounts receivable includes $1,426,800 ($984,000 US) from a customer pending
the resolution of a product dispute. The company is seeking arbitration in respect of the product and
payment of the outstanding amount.
From time to time the company, in the normal course of business, is involved in a number of
outstanding lawsuits. The aggregate liability which may result from these lawsuits is not considered to be a
material amount. In some cases lawsuits by a customer initiate an analogous claim by the company for
recourse to a supplier.