Blackberry 2005 Annual Report Download - page 51

49
Non-recurring engineering contracts
Revenue from non-recurring engineering contracts is recognized as specific contract milestones are met.
The attainment of milestones approximates actual performance.
Other
Revenue from the sale of accessories and original equipment manufacturer products (“OEM”) radios is
recognized when title is transferred to the customer and all significant contractual obligations that affect
the customer’s final acceptance have been fulfilled. Provisions are made at the time of sale for applicable
warranties, royalties and estimated product returns. Technical support contracts extending beyond the current
period are recorded as deferred revenue.
Shipping and handling costs
Where they can be reasonably attributed to certain revenue, shipping and handling costs are included in
Cost of sales, otherwise they are included in Selling, marketing and administration.
Multiple-element arrangements
The Company enters into transactions that represent multiple-element arrangements, which may include any
combination of hardware, service and software. These multiple-element arrangements are assessed to
determine whether they can be separated into more than one unit of accounting or element for the purpose of
revenue recognition. When the appropriate criteria for separating revenue into more than one unit of accounting
is met and there is vendor specific objective evidence of fair value for all units of accounting or elements in an
arrangement, the arrangement consideration is allocated to the separate units of accounting or elements based
on each unit’s relative fair value. This vendor specific objective evidence of fair value is established through
prices charged for each revenue element when that element is sold separately. The revenue recognition policies
described above are then applied to each unit of accounting.
(p) Research and development
The Company is engaged at all times in research and development work. Research and development costs, other
than for the acquisition of capital assets, are charged as an operating expense of the Company as incurred.
(q) Government assistance
The Company has received no government assistance in fiscal 2005 and 2004.
Government funding towards research and development expenditures received in fiscal 2003 was primarily
with respect to grants from Technology Partnerships Canada on account of eligible scientific research and
experimental development expenditures. Assistance related to the acquisition of capital assets used for
research and development is credited against the cost of related capital assets and all other assistance
is credited against related expenses as incurred.
(r) Statements of comprehensive income (loss)
U.S. GAAP, SFAS 130, Reporting Comprehensive Income, establishes standards for the reporting and display of
comprehensive income and its components in general-purpose financial statements. Comprehensive income is
defined as the change in net assets of a business enterprise during a period from transactions and other events
and circumstances from non-owner sources, and includes all changes in equity during a period except those
resulting from investments by owners and distributions to owners. The reportable items of comprehensive
income are cash flow hedges as described in note 19, and changes in the fair value of investments available
for sale as described in note 4. Realized gains (losses) on available-for-sale investments are reclassified into
earnings using the specific identification basis.
(s) Earnings (loss) per share
Earnings (loss) per share is calculated based on the weighted average number of shares outstanding during
the year. The treasury stock method is used for the calculation of the dilutive effect of stock options and
common share purchase warrants.
For the years ended February 26, 2005, February 28, 2004 and March 1, 2003