Blackberry 2006 Annual Report Download - page 49

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)
Annual Report 2006 47
For the years ended March 4, 2006, February 26, 2005 and February 28, 2004
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 xtures 20% per annum declining balance
During scal 2005, 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 ve years. The impact of this change was applied on a prospective basis commencing with
the rst quarter of scal 2005. The impact of this change of accounting estimate resulted in incremental
amortization expense of $4,275 in scal 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) Impairment of long-lived assets
The Company reviews long-lived assets such as property, plant and equipment and intangible assets with
nite useful lives for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. If the total of the expected undiscounted future cash ows is less than the
carrying amount of the asset, a loss is recognized for the excess of the carrying amount over the fair value
of the asset.
(n) Goodwill
Goodwill represents the excess of the purchase price of business acquisitions over the fair value of
identiable 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 rst 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 unnecessary.