Blackberry 2009 Annual Report Download - page 64

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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
the potential impact that a restructuring will have on the value
of these securities and has classified these securities as long-
term investments. The Company may recognize additional
impairment charges on these securities if the restructuring
is unsuccessful or there is an other-than-temporary
deterioration in the value of the underlying assets.
Fair Value Measurements
SFAS 157 defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the
measurement date. SFAS 157 establishes a three-tier value
hierarchy, which prioritizes the inputs used in the valuation
methodologies in measuring fair value:
• Level 1 — Unadjusted quoted prices at the measurement
date for identical assets or liabilities in active markets.
• Level 2 — Observable inputs other than quoted prices
included in Level 1, such as quoted prices for similar
assets and liabilities in active markets; quoted prices for
identical or similar assets and liabilities in markets that are
not active; or other inputs that are observable or can be
corroborated by observable market data.
• Level 3 — Significant unobservable inputs which are
supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize
the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value.
The following table presents the Company’s assets and
liabilities that are measured at fair value on a recurring basis:
A Structured Investment Vehicle (“SIV”) is a fund that
seeks to generate investment returns by purchasing high
grade long-term fixed income instruments and funding those
purchases by issuing short-term debt instruments. In late
2007, widespread illiquidity in the market has prevented SIVs
from accessing necessary funding for ongoing operations. In
determining the value for these securities, the Company has
considered available evidence including changes in general
market conditions, specific industry and individual company
data, the length of time and the extent to which the fair value
has been less than cost, the financial condition, the near-term
prospects of the individual investment and the Company’s
intent and ability to hold the debt securities.
The outstanding SIV holdings have been placed with
an enforcement manager to be restructured or sold at the
election of each senior note holder. The Company has
elected to participate in the restructuring of the securities.
The Company believes that the anticipated restructuring
will likely result in extended maturities and/or a pro-rata
distribution of proceeds from the income and principal
payments on the assets underlying the securities. As part of
this process, the Company received a total of $4.5 million in
principal and interest payments from the SIV. As at February
28, 2009, the Company held $22.5 million face value of SIV
securities that were negatively impacted by the changes
in market conditions and has not recorded an other-than-
temporary impairment charges in fiscal 2009 (in fiscal
2008, the Company recorded any other-than-temporary
impairment charge of $3.8 million). Given the uncertainty of
the restructuring at this time, the Company cannot determine
As at February 28, 2009 Level 1 Level 2 Level 3 Total
Assets
Available-for-sale investments $ 5,000 $ 1,699,251 $ 51,544 $ 1,755,795
Derivative instruments - 70,100 - 70,100
Total Assets $ 5,000 $ 1,769,351 $ 51,544 $ 1,825,895
Liabilities
Derivative instruments - 56,827 - 56,827
Total Liabilities $ - $ 56,827 $ - $ 56,827