Blackberry 2011 Annual Report Download - page 62

RESEARCH IN MOTION LIMITED
Notes to the Consolidated Financial Statements
In millions 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 information, including email, voice
instant messaging, short message service (SMS), Internet and intranet-based applications and browsing. RIM technology also enables a
broad array of third party developers and manufacturers to enhance their products and services through software development kits,
wireless connectivity to data and third-party support programs. 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, the RIM Wireless Handheld
TM
product line, software development tools 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 26, 2011, February 27, 2010, and February 28, 2009 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
RESEARCH IN MOTION ANNUAL REPORT 2011 49