Blackberry 2005 Annual Report Download - page 49

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(k) Capital assets
Capital assets are stated at cost less accumulated amortization. No amortization is provided for on construction
in progress until the assets are ready for use. Amortization is provided using the following rates and methods:
Buildings, leaseholds and other Straight-line over terms between 5 and 40 years
BlackBerry operations and other
information technology Straight-line over terms between 3 and 5 years
Manufacturing equipment, research and
development equipment, and tooling Straight-line over terms between 2 and 8 years
Furniture and fixtures 20% per annum declining balance
During the year, the Company re-evaluated the estimated useful lives of certain of its information technology
assets and determined that the estimated useful lives should be reduced to periods of three or four years
from five years. The impact of this change was applied on a prospective basis commencing with the first
quarter of fiscal 2005. The impact of this change of accounting estimate resulted in incremental amortization
expense of $4,275 in fiscal 2005. Of this amount, $1,750 was included in Cost of sales, and $2,525 was
included in Amortization.
(l) Intangible assets
Intangible assets are stated at cost less accumulated amortization and are comprised of licenses, patents
and acquired technology. Licenses include licenses or agreements that the Company has negotiated with
third-parties upon use of third-parties’ technology. Patents include all costs necessary to acquire intellectual
property such as patents and trademarks, as well as legal defence costs arising out of the assertion of any
Company-owned patents. Acquired technology consists of purchased developed technology arising from the
Company’s corporate acquisitions.
Intangible assets are amortized as follows:
Acquired technology Straight-line over 2 to 5 years
Licenses Lesser of 5 years or on a per unit basis based
upon the anticipated number of units sold
during the terms of the license agreements
Patents Straight-line over 17 years
(m) Goodwill
Effective March 3, 2002, the Company adopted the new recommendations in accordance with SFAS 142 with
regards to goodwill and intangible assets and accordingly, goodwill is no longer amortized to earnings, but
periodically tested for impairment. Upon adoption of these new recommendations, goodwill must be tested
for impairment at the beginning of each year.
Goodwill represents the excess of the purchase price of business acquisitions over the fair value of identifiable
net assets acquired in such acquisitions. Goodwill is allocated as at the date of the business combination.
Goodwill is not amortized, but is tested for impairment annually, or more frequently if events or changes in
circumstances indicate the asset might be impaired.
The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit
including goodwill is compared with its fair value. When the fair value of a reporting unit exceeds its
carrying amount, goodwill of the reporting unit is considered not to be impaired, and the second step is
considered unnecessary.
For the years ended February 26, 2005, February 28, 2004 and March 1, 2003