Blackberry 2004 Annual Report Download - page 36

1. Summary of Significant Accounting Policies
(a) General
These consolidated financial statements have been
prepared by management in accordance with United
States generally accepted accounting principles
(“U.S. GAAP”) on a basis consistent for all periods
presented.
Historically, the primary consolidated financial
statements of the Company have been prepared in
accordance with Canadian GAAP with an annual
reconciliation of the Company’s financial position
and results of operations as calculated using U.S.
GAAP. In order to provide information on a more
comparable basis with a majority of the industry,
effective March 2, 2003 the Company initiated
reporting its financial position, results of operations
and cash flows under U.S. GAAP in its consolidated
financial statements.
The significant accounting policies used in these
U.S. GAAP consolidated financial statements are as
follows:
(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 and are
considered to be fully integrated operations.
(c) Use of estimates
The preparation of the Company’s consolidated
financial statements in accordance with U.S. GAAP
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
financial statements and the reported amounts of
revenues and expenses during the reporting periods.
Significant areas requiring the use of management
estimates relate to the determination of reserves for
various litigation claims, 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 deferred tax assets and the related
components of the valuation allowance, provision
for warranty, and the fair values of financial
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.
notes to the consolidated financial statements
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Research In Motion Limited • Incorporated Under the Laws of Ontario (In thousands of United States dollars, except per share data, and except as otherwise indicated)
Nature of Business
Research In Motion Limited (the “Company” or
“RIM”) 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.