Blackberry 2002 Annual Report Download - page 24

Handheld and other hardware products Revenue from the sale of hardware is recognized when title is transferred to
the customer and all significant contractual obligations that affect the customer’s final acceptance have been fulfilled.
Provisions are made at the time of sale for warranties, royalties and estimated product returns. For hardware products for
which the software is deemed not to be incidental, the Company recognizes revenue in accordance with the American
Institute of Certified Public Accountants Statement of Position 97-2, Software Revenue Recognition (“SOP 97-2”).
Service Revenue is recognized rateably on a monthly basis when the service is provided. In instances where the
Company bills the customer prior to performing the service, the prepayment is recorded as deferred revenue.
Software Revenue from the licensed software is recognized at the inception of the licence term and in accordance
with SOP 97-2. Revenue from software maintenance, unspecified upgrades and technical support is recognized
over the period such items are delivered or services are provided.
Non-recurring engineering services Revenue is recognized as specific contract milestones are met. The attainment
of milestones approximates actual performance.
(m) Research and development –The Company is engaged at all times in research and development work. Research
and development costs, other than capital asset acquisitions, are charged as an operating expense of the Company as
incurred, unless they meet generally accepted accounting principles for deferral.
(n) Government assistance – Government assistance towards research and development expenditures is received as
grants from Technology Partnerships Canada and in the form of investment tax credits on account of eligible scientific
research and experimental development expenditures. Assistance related to the acquisition of capital assets used for
research and development is credited against the cost of the related capital assets and all other assistance is credited
against related expenses, as incurred.
(o) Earnings (loss) per share – Basic earnings (loss) per share is calculated based on the weighted average number
of shares outstanding during the year. Diluted earnings per share is calculated on the weighted average number of
shares that would have been outstanding during the year had all the dilutive options been exercised at the beginning
of the year, or date of issuance, if issued during the fiscal year. Effective March 1, 2000, the Company adopted the
CICA recommendations relating to the accounting for earnings (loss) per share. The recommendations require the
application of the treasury stock method for the calculation of the dilutive effect of stock options and have been applied
retroactively. There was no impact on basic or diluted earnings per share previously reported except that diluted
earnings per share for the year ended February 29, 2000 decreased from $0.15 to $0.14.
(p) Stock-based compensation plan – The Company has a stock-based compensation plan, which is described
in note 9(b). The options are granted at the fair market value of the shares on the day of grant of the options. No
compensation expense is recognized when stock options are issued to employees. Any consideration paid by
employees on exercise of stock options is credited to share capital.
In November 2001, the CICA issued Handbook Section 3870, Stock-Based Compensation and Other Stock-Based
Payments. This standard requires that certain types of stock-based compensation arrangements be accounted for at
fair value, giving rise to compensation expense, for fiscal years beginning on or after January 1, 2002. The Company
plans to adopt this standard in fiscal 2003 and does not expect a material impact on the consolidated financial
position or results of operations.
RESEARCH IN MOTION LIMITED UNITED STATES DOLLARS, IN THOUSANDS EXCEPT PER SHARE DATA, AND EXCEPT AS OTHERWISE INDICATED.
2
2