Blackberry 2009 Annual Report Download - page 55

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53
(d) Use of estimates
The preparation of the Company’s consolidated financial
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
financial statements and the reported amounts of revenues
and expenses during the reporting periods. Significant
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, royalties, amortization
expense, implied fair value of goodwill, provision for income
taxes, realization of deferred income tax assets and the
related components of the valuation allowance, provision for
warranty and the fair values of financial 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 remeasurement method.
Accordingly, monetary assets and liabilities are translated
using the exchange rates in effect at the consolidated
balance sheet date and revenues and expenses at the rates
of exchange prevailing when the transactions occurred.
Resulting exchange gains and losses are included in income.
Non-monetary assets and liabilities are translated at historical
exchange rates.
(f) Cash and cash equivalents
Cash and cash equivalents consist of balances with banks and
liquid investments with maturities of three months or less at
the date of acquisition and are carried on the consolidated
balance sheets at fair value.
(g) Trade receivables
Trade receivables which reflect invoiced and accrued
revenue are presented net of an allowance for doubtful
accounts. The allowance was $2.1 million at February 28,
2009 (March 1, 2008 - $2.0 million). Bad debt expense
(recovery) was $24 for the year ended February 28, 2009
(March 1, 2008 – ($26); March 3, 2007 - $274).
The allowance for doubtful accounts reflects estimates
of probable losses in trade receivables. The Company is
dependent on a number of significant customers and on large
complex contracts with respect to sales of the majority of its
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 portfolio of award-winning products, services
and embedded technologies are used by thousands of
organizations around the world and include the BlackBerry
wireless solution, and other software and hardware. The
Company’s sales and marketing efforts include collaboration
with strategic partners and distribution channels to promote
the sale of its products and services as well as its own
supporting sales and marketing teams. 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 Global Select Market under the symbol “RIMM”.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General
These consolidated financial 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 except as described
in note 2. Certain of the comparative figures have been
reclassified to conform to the current year presentation.
The significant accounting policies used in these U.S.
GAAP consolidated financial statements are as follows:
(b) Fiscal year
The Company’s fiscal year end date is the 52 or 53 weeks
ending on the last Saturday of February, or the first Saturday
of March. The fiscal years ended February 28, 2009, March 1,
2008 and March 3, 2007 comprise 52 weeks.
(c) Basis of consolidation
The consolidated financial statements include the accounts
of all subsidiaries with intercompany transactions and
balances eliminated on consolidation. All of the Company’s
subsidiaries are wholly-owned.
RESEARCH IN MOTION LIMITED
notes to the consolidated financial statements
In thousands of United States dollars, except share and per share data, and except as otherwise indicated