Blackberry 1999 Annual Report Download - page 26

Notes to Financial Statements
February 28, 1999
Nature of Business
Research In Motion Limited (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. The Company’s shares trade
publicly on the Toronto Stock Exchange under the symbol RIM and on the NASDAQ AMEX Stock Market -
National Market under the symbol RIMM.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General -
These financial statements have been prepared by management in accordance with accounting principles
generally accepted in Canada on a basis consistent with prior years, which conforms in all material respects
with accounting principles generally accepted in the United States except as presented in note 16. 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 -
A significant portion of the Company’s sales and purchases are transacted with companies in the United
States. As a result, the Company is exposed to risks relating to foreign exchange fluctuations. The Company
mitigates this risk by maintaining U.S. dollar funds. Marketable securities are subject to market risk in that
their value will fluctuate as a result of changes in market prices. Unless otherwise noted, the fair value of
financial instruments approximates carrying values.
(c) Cash and cash equivalents -
Cash and cash equivalents consist of cash balances with banks and short term investments with original
maturities of less than three months.
(d) Marketable securities -
Marketable securities include preference shares and debentures and are carried at the lower of cost or
market value.
(e) 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. Cost includes the cost of materials plus direct labour applied to the
product and the applicable share of manufacturing overhead.
(f) 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;
Leasehold improvements - straight-line over five years;
Patents - straight-line over seventeen years.
Amortization is recorded from the date of acquisition.
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