Blackberry 2002 Annual Report Download - page 22

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nature of Business
Research In Motion Limited (the “Company”) is a designer, manufacturer and marketer of wireless solutions for the
mobile communications market. Through development and integration of hardware, software and services, the Company
provides wireless solutions for seamless access to time-sensitive information including email, messaging, Internet and
intranet-based applications. The Company was incorporated on March 7, 1984 under the Ontario Business Corporations
Act. The Company’s shares are traded on The Toronto Stock Exchange under the symbol RIM and on the Nasdaq
National Market under the symbol RIMM.
1. Summary of Significant Accounting Policies
(a) General –These consolidated financial statements have been prepared by management in accordance with
Canadian generally accepted accounting principles (“Canadian GAAP”) on a basis consistent with prior years, which
conforms in all material respects with United States generally accepted accounting principles (“U.S. GAAP”), except
as presented in note 18.
(b) Basis of consolidation –The consolidated financial statements include the accounts of all subsidiaries with
intercompany transactions and balances eliminated. All of the Company’s subsidiaries are wholly-owned.
(c) Use of estimates –The preparation of the Company’s consolidated financial statements in accordance with
generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the dates of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.
Actual results could differ from these estimates.
(d) Foreign currency translation – Foreign currency denominated assets and liabilities of the Company and all
wholly-owned subsidiaries, which are considered to be fully integrated operations, are translated into U.S. dollars,
the currency of measurement,using the temporal method. Accordingly, monetary assets and liabilities are translated
using the exchange rates in effect at the balance sheet date, non-monetary assets and liabilities at historical exchange
rates, and revenues and expenses at the rates of exchange prevailing when the transactions occurred. Resulting
exchange gains and losses are included in income.
Where appropriate, the Company utilizes derivative financial instruments to reduce exposure to fluctuations in foreign
currency exchange rates. Gains and losses related to derivatives that are eligible for hedge accounting are deferred
and recognized in the same period as the corresponding hedged positions.
(e) Cash and cash equivalents – All highly liquid investments with original maturities of three months or less are
classified as cash and cash equivalents. Cash and cash equivalents consist of cash balances with banks and
short-term investments.
(f) Marketable securities – Marketable securities include bank certificates of deposit, commercial paper, corporate
bonds and government agency paper with original maturities in excess of three months and are carried at the
lower of cost and market value.
(g) Inventories –Raw materials are stated at the lower of cost and replacement cost. Work in process and finished
goods inventories are stated at the lower of cost and net realizable value. Cost includes the cost of materials plus
direct labour applied to the product and the applicable share of manufacturing overhead. Cost is determined on a
first-in-first-out basis.
(h) Capital assets –Capital assets are stated at cost less accumulated amortization. Amortization is provided using
the following rates and methods:
Buildings and leaseholds - Straight-line over terms between 5 and 40 years
Information technology - Straight-line over 5 years
Furniture, fixtures, tooling and equipment - 20% per annum declining balance
RESEARCH IN MOTION LIMITED UNITED STATES DOLLARS, IN THOUSANDS EXCEPT PER SHARE DATA, AND EXCEPT AS OTHERWISE INDICATED.
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