Blackberry 2011 Annual Report Download - page 87

Management reviews all of the relevant facts for each claim and applies judgment in evaluating the likelihood and, if applicable, the
amount of any potential loss. Where it is considered likely for a material exposure to result and where the amount of the claim is
quantifiable, provisions for loss are made based on management’s assessment of the likely outcome. The Company does not provide
for claims that are considered unlikely to result in a significant loss, claims for which the outcome is not determinable or claims where
the amount of the loss cannot be reasonably estimated. Any settlements or awards under such claims are provided for when reasonably
determinable.
Additional lawsuits and claims, including purported class actions and derivative actions, may be filed or made based upon the
Company’s historical stock option granting practices. Management assesses such claims and where considered likely to result in a
material exposure and, where the amount of the claim is quantifiable, provisions for loss are made based on management’s assessment
of the likely outcome. The Company does not provide for claims that are considered unlikely to result in a significant loss, claims for
which the outcome is not determinable or claims where the amount of the loss cannot be reasonably estimated. Any settlements or
awards under such claims are provided for when reasonably determinable.
See the “Legal Proceedings and Regulatory Action” section of RIM’s Annual Information Form for additional unaudited information
regarding the Company’s legal proceedings, which is included in RIM’s Annual Report on Form 40-F and “Legal Proceedings” in the
Management’s Discussion and Analysis (“MD&A”) of financial condition and results of operations for fiscal 2011.
11. 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 warranty expense and actual warranty experience from March 1, 2008 to February 26, 2011 as well
as the accrued warranty obligations as at February 26, 2011 are set forth in the following table:
Accrued warranty obligations as at March 1, 2008 $85
Actual warranty experience during fiscal 2009 (147)
Fiscal 2009 warranty provision 259
Adjustments for changes in estimate (13)
Accrued warranty obligations as at February 28, 2009 184
Actual warranty experience during fiscal 2010 (416)
Fiscal 2010 warranty provision 463
Adjustments for changes in estimate 21
Accrued warranty obligations as at February 27, 2010 252
Actual warranty experience during fiscal 2011 (657)
Fiscal 2011 warranty provision 806
Adjustments for changes in estimate 58
Accrued warranty obligations as at February 26, 2011 $459
74 RESEARCH IN MOTION ANNUAL REPORT 2011
RESEARCH IN MOTION LIMITED
Notes to the Consolidated Financial Statements continued
In millions of United States dollars, except share and per share data, and except as otherwise indicated