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28
Research฀In฀Motion฀Limited฀฀|฀฀Incorporated฀Under฀the฀Laws฀of฀Ontario฀(United฀States฀dollars,฀in฀thousands฀except฀per฀share฀data฀or฀as฀otherwise฀indicated)
29
For฀the฀years฀ended฀March฀1,฀2003,฀March฀2,฀2002฀and฀February฀28,฀2001
Nature฀of฀Business
Research฀In฀Motion฀Limited฀(the฀“Company”)฀is฀a฀designer,฀manufacturer฀and฀marketer฀of฀wireless฀
solutions฀for฀the฀worldwide฀mobile฀communications฀market.฀Through฀the฀development฀of฀integrated฀
hardware,฀software฀and฀services฀that฀support฀multiple฀wireless฀network฀standards,฀the฀Company฀
provides฀platforms฀and฀solutions฀for฀seamless฀access฀to฀time-sensitive฀information฀including฀email,฀
phone,฀SMS฀messaging,฀Internet฀and฀intranet-based฀applications.฀The฀Company’s฀technology฀also฀
enables฀a฀broad฀array฀of฀third฀party฀developers฀and฀manufacturers฀to฀enhance฀their฀products฀and฀
services฀with฀wireless฀connectivity฀to฀data.฀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฀Signicant฀Accounting฀Policies
(a)฀General฀–฀These฀consolidated฀nancial฀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฀21.฀
(b)฀Basis฀of฀consolidation฀–฀The฀consolidated฀nancial฀statements฀include฀the฀accounts฀of฀all฀
subsidiaries฀with฀intercompany฀transactions฀and฀balances฀eliminated.฀All฀of฀the฀Company’s฀
subsidiaries฀are฀wholly-owned฀and฀are฀considered฀to฀be฀fully฀integrated฀operations.
(c)฀Use฀of฀estimates฀–฀The฀preparation฀of฀the฀Company’s฀consolidated฀nancial฀statements฀in฀
accordance฀with฀Canadian฀generally฀accepted฀accounting฀principles฀requires฀management฀to฀make฀
estimates฀and฀assumptions฀that฀affect฀the฀reported฀amounts฀of฀assets฀and฀liabilities฀and฀disclosure฀
of฀contingent฀liabilities฀as฀at฀the฀dates฀of฀the฀consolidated฀nancial฀statements฀and฀the฀reported฀
amounts฀of฀revenues฀and฀expenses฀during฀the฀reporting฀periods.฀Signicant฀areas฀requiring฀the฀
use฀of฀management฀estimates฀relate฀to฀the฀determination฀of฀reserves฀for฀various฀litigation฀awards,฀
allowance฀for฀doubtful฀accounts,฀provision฀for฀excess฀and฀obsolete฀inventory,฀fair฀values฀of฀assets฀
acquired฀and฀liabilities฀assumed฀in฀business฀combinations,฀amortization฀expense,฀implied฀fair฀value฀
of฀goodwill,฀realization฀of฀future฀tax฀assets฀and฀the฀related฀components฀of฀the฀valuation฀allowance,฀
provision฀for฀warranty,฀and฀the฀fair฀values฀of฀nancial฀instruments.฀Actual฀results฀could฀differ฀from฀
these฀estimates.
(d)฀Foreign฀currency฀translation฀–฀The฀U.S.฀dollar฀is฀the฀functional฀and฀reporting฀currency฀of฀the฀
Company.฀Foreign฀currency฀denominated฀assets฀and฀liabilities฀of฀the฀Company฀and฀all฀of฀its฀
subsidiaries฀are฀translated฀into฀U.S.฀dollars฀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.฀
(e)฀Cash฀and฀cash฀equivalents฀–฀Cash฀and฀cash฀equivalents฀consist฀of฀balances฀with฀banks฀and฀liquid฀
short-term฀investments฀with฀maturities฀of฀three฀months฀or฀less฀at฀the฀date฀of฀acquisition.฀Short-term฀
investments฀are฀carried฀on฀the฀balance฀sheet฀at฀the฀lower฀of฀cost฀or฀market฀value.
(f)฀Marketable฀securities฀–฀Marketable฀securities฀consist฀of฀liquid฀short-term฀investments฀with฀
maturities฀of฀between฀three฀months฀and฀one฀year฀at฀the฀date฀of฀acquisition,฀and฀are฀carried฀
on฀the฀balance฀sheet฀at฀the฀lower฀of฀cost฀or฀market฀value.
(g)฀Long-term฀portfolio฀investments฀–฀All฀investments฀with฀maturities฀in฀excess฀of฀one฀year฀are฀
classied฀as฀long-term฀portfolio฀investments฀and฀are฀carried฀at฀cost.฀The฀Company฀does฀not฀exercise฀
signicant฀inuence฀with฀respect฀to฀any฀of฀these฀investments.฀In฀the฀event฀of฀a฀decline฀in฀value฀which฀
is฀other฀than฀temporary,฀the฀investments฀are฀written฀down฀to฀estimated฀realizable฀value.
Notes฀to฀the฀Consolidated฀
Financial฀Statements