Blackberry 2004 Annual Report Download - page 44

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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)
Accumulated Net book
Cost amortization value
As at March 1, 2003
Land $ 8,850 $ – $ 8,850
Buildings and leaseholds 66,254 6,671 59,583
Information technology 81,319 31,893 49,426
Furniture, fixtures, tooling and equipment 68,873 25,549 43,324
$ 225,296 $ 64,113 $ 161,183
7. Intangible Assets
Intangible assets are comprised of:
Accumulated Net book
Cost amortization value
As at February 28, 2004
Acquired technology $10,012 $3,746 $6,266
Licenses 52,216 15,299 36,917
Patents 25,156 4,070 21,086
$ 87,384 $ 23,115 $ 64,269
Accumulated Net book
Cost amortization value
As at March 1, 2003
Acquired technology $ 10,012 $ 1,684 $ 8,328
Licenses 28,370 1,085 27,285
Patents 16,751 885 15,866
$ 55,133 $ 3,654 $ 51,479
During fiscal 2004, the Company recorded an
additional amortization expense of $1,318 with
respect to certain capital assets no longer used by
the Company; $618 of this is included in Cost of sales.
For the year ended February 28, 2004, amortization
expense related to capital assets was $35,067
(March 1, 2003 - $27,997; March 2, 2002 - $16,753).
Acquired technology includes all Licenses and
patents acquired by the Company as a result of the
acquisitions described in note 8. Licenses include
licenses or agreements that the Company has
negotiated with third parties upon use of the third
parties’ technology. Patents includes all costs
necessary to record a patent, as well as defense
costs when there is perceived infringement by the
Company of those patents.
During fiscal 2004, the Company recorded provisions
amounting to $4,327 against the carrying values of
certain of its intangible assets as a result of changes
in the Company’s current and intended product
offerings. Of this amount $2,750 is included in Cost
of sales with the balance of $1,577 recorded as
Amortization expense. Such charges reflect
management’s assessment of net realizable values.
For the year ended February 28, 2004, amortization
expense related to intangible assets was $19,462
(March 1, 2003 - $2,848; March 2, 2002 - $574).
Total additions to intangible assets in 2004 were
$32,252 (2003 - $38,324).
Based on the carrying value of the identified
intangible assets as at February 28, 2004, and
assuming no subsequent impairment of the
underlying assets, the annual amortization expense
is expected to be as follows: 2005 - $16 million;
2006 - $17 million; 2007 - $13 million; 2008 -
$3 million; 2009 - $2 million.
Licenses are amortized over the lessor of five years
or on a per unit basis based upon the anticipated
number of units sold during the terms of the license
agreements.