Blackberry 2005 Annual Report Download - page 46

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Notes to the Consolidated Financial Statements
Nature of Business
Research In Motion Limited (“RIM” or the “Company”) is a leading designer, manufacturer and marketer of
innovative wireless solutions for the worldwide mobile communications market. Through the development of
integrated hardware, software and services that support multiple wireless network standards, RIM provides
platforms and solutions for seamless access to email, phone, SMS (short message service), personal
organizer, Internet and intranet-based corporate data applications. RIM also licenses its technology to industry
leading handset and software vendors to enable these companies to offer wireless data services using the
BlackBerry Enterprise Server (“BES”) and BlackBerry Internet Service (“BIS”). RIM technology also enables a
broad array of third party developers and manufacturers to enhance their products and services with wireless
connectivity. RIM’s products, services and embedded technologies are commercially available through a
variety of offerings including the BlackBerry wireless platform, the RIM wireless handheld product line,
technical support services and BlackBerry licensing relationships. 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 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 generally accepted accounting principles (“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. Consolidated financial statements prepared in U.S. dollars and under
Canadian GAAP are prepared separately and made available to all shareholders. Those Canadian GAAP
consolidated financial statements are filed with Canadian regulatory authorities.
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 on consolidation. 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 future
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.
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)