Blackberry 2006 Annual Report Download - page 51
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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)
Annual Report 2006 49
For the years ended March 4, 2006, February 26, 2005 and February 28, 2004
Revenue from licensed software is recognized at the inception of the license term and in accordance with
SOP 97-2. Revenue from software maintenance, unspecied upgrades and technical support contracts is
recognized over the period that such items are delivered or that services are provided.
Revenue for non-recurring engineering contracts is recognized as specic contract milestones are met.
The attainment of milestones approximates actual performance.
Revenue from the sale of accessories is recognized when title is transferred to the customer and all
signicant contractual obligations that affect the customer’s nal acceptance have been fullled. Technical
support contracts extending beyond the current period are recorded as deferred revenue. Revenue from
repair and maintenance programs is recognized when the service is delivered which is when the title is
transferred to the customer and all signicant contractual obligations that affect the customer’s nal
acceptance have been fullled.
Shipping and handling costs are included in
Cost of sales
where they can be reasonably attributed to
certain revenue; otherwise they are included in
Selling, Marketing and Administration
.
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 specic 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 specic 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.
(q) Research and development
The Company is engaged 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.
(r) Government assistance
The Company has received no government assistance in scal 2006, 2005 and 2004.
Government funding towards research and development expenditures received in scal 2003 was primarily
with respect to grants from Technology Partnerships Canada on account of eligible scientic 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.