Blackberry 2006 Annual Report Download - page 46

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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 (“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 time-sensitive information including email, phone,
short messaging service (SMS), Internet and intranet-based applications. RIM technology also enables a
broad array of third party developers and manufacturers to enhance their products and services with
wireless connectivity to data. RIM’s products, services and embedded technologies are used by thousands
of organizations around the world and include the BlackBerry wireless platform, the RIM Wireless Handheld
product line, software development tools, radio-modems and other hardware and software. 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 Signicant Accounting Policies
(a) General
These consolidated nancial 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. The signicant accounting policies used in these U.S. GAAP consolidated nancial statements
are as follows:
(b) Fiscal year
The Company’s scal year end date is the 52 or 53 weeks ending on the last Saturday of February, or the
rst Saturday of March. The scal year ended March 4, 2006 comprises 53 weeks compared to 52 weeks
for the scal year ended February 26, 2005.
(c) Basis of consolidation
The consolidated nancial 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.
(d) Use of estimates
The preparation of the Company’s consolidated nancial 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 nancial statements and the
reported amounts of revenues and expenses during the reporting periods. Signicant 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 nancial instruments. Actual results could differ from these estimates.
(e) 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
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