Blackberry 2010 Annual Report Download - page 66

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
1. RESEARCH IN MOTION LIMITED AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 and millions of consumers 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, as well as its own supporting sales and marketing teams,
to promote the sale of its products and services. 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”.
Basis of presentation and preparation
The consolidated financial statements include the accounts of all subsidiaries of the Company with intercompany
transactions and balances eliminated on consolidation. All of the Company’s subsidiaries are wholly-owned. 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 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 27, 2010, February 28, 2009, and March 1, 2008 comprise 52 weeks.
The significant accounting policies used in these U.S. GAAP consolidated financial statements are as follows:
Use of estimates
The preparation of the consolidated financial statements requires management to make estimates and assumptions with
respect to the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities. Significant areas requiring the use of management estimates relate to the determination of reserves for various
litigation claims, provisions for excess and obsolete inventories and liabilities for purchase commitments with contract
manufacturers and suppliers, 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, provisions for warranty and the fair values of financial
instruments. Actual results could differ from these estimates.
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. 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. Remeasurement adjustments are included in
income. Non-monetary assets and liabilities are translated at historical exchange rates.
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.
Accounts receivable, net
The accounts receivable balance which reflects invoiced and accrued revenue is presented net of an allowance for
doubtful accounts. The allowance for doubtful accounts reflects estimates of probable losses in accounts 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 products, software and services. The Company expects the majority of its accounts receivable balances to
continue to come from large customers as it sells the majority of its devices and software products and service relay
access through network carriers and resellers rather than directly.
NOTE 1
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