Blackberry 2008 Annual Report Download - page 80

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78
RESEARCH IN MOTION LIMITED
notes to the consolidated financial statements continued
In thousands of United States dollars, except share and per share data, and except as otherwise indicated
13. PRODUCT WARRANTY
The Company estimates its warranty costs at the time of
revenue recognition based on historical warranty claims
experience and records the expense in Cost of sales. The
warranty accrual balance is reviewed quarterly to establish
that it materially reflects the remaining obligation based on
the anticipated future expenditures over the balance of the
obligation period. Adjustments are made when the actual
warranty claim experience differs from estimates.
The change in the Company’s accrued warranty
obligations from February 26, 2005 to March 1, 2008 as well as
the accrued warranty obligations as at March 1, 2008 are set
forth in the following table:
to cooperate with each of these agencies. While it is not
possible to predict at this time what action may result from
the investigations, the Company anticipates that RIM or
certain of its directors or officers may be subject to potential
enforcement action or prosecution, which if successful, could
result in civil or criminal penalties or other remedies. Due
to uncertainties related to the potential outcomes of the
investigations, the Company is unable to assess what, if any,
exposure or loss it may incur as a result of the outcomes of
these investigations. As such, no amounts have been accrued
in the Company’s financial statements for any potential loss.
Accrued warranty obligations at February 26, 2005 $ 14,657
Actual warranty experience during fiscal 2006 (24,669)
Fiscal 2006 warranty provision 28,180
Adjustments for changes in estimate 4,219
Accrued warranty obligations at March 4, 2006 22,387
Actual warranty experience during fiscal 2007 (38,554)
Fiscal 2007 warranty provision 49,736
Adjustments for changes in estimate 3,100
Accrued warranty obligations at March 3, 2007 36,669
Actual warranty experience during fiscal 2008 (68,166)
Fiscal 2008 warranty provision 116,045
Accrued warranty obligations at March 1, 2008 $ 84,548
14. GOVERNMENT ASSISTANCE
The Company previously entered into a development
agreement with Technology Partnerships Canada (“TPC”),
which provide partial funding for certain research and
development projects.
The agreement with TPC is for a development project
under which total contributions from TPC have been $23,300.
The Company has fulfilled all prerequisite funding conditions
and recorded all of the contributions as at February 28,
2004. This contribution will be repayable to TPC in the form
of a royalty of 2.2% on gross business revenues, subject to
the Company maintaining a minimum number of Canadian
employees and to certain annual maximum amounts through
2015, not exceeding $46,000. The Company recorded $4,273
on account of TPC royalty repayment expense during fiscal
2008 (March 3, 2007 – $2,795; March 4, 2006 – $1,929).