Consolidated Balance Sheets Details

6 Months Ended

Aug. 31, 2021

Balance Sheet Related Disclosures [Abstract]

4. CONSOLIDATED BALANCE SHEET DETAILS

Accounts Receivable, Net of Allowance

The allowance for credit losses as at August 31, 2021 was $9 million (February 28, 2021 - $10 million).

The Company recognizes current estimated credit losses for accounts receivable, net of allowance. The cumulative expected credit losses (“CECL”) for accounts receivable, net are estimated based on days past due and region for each customer in relation to a representative pool of assets consisting of a large number of customers with similar risk characteristics that operate under similar economic environments. The Company determined the CECL by estimating historical credit loss experience based on the past due status and region of the customers, adjusted as appropriate to reflect current conditions and estimates of future economic conditions, inclusive of the effect of the COVID-19 pandemic on credit losses. The duration and severity of the COVID-19 pandemic and the resulting market volatility are highly uncertain and, as such, the impact on expected credit losses is subject to significant judgment and may cause variability in the Company’s allowance for credit losses in future periods. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. The Company also has long-term accounts receivable included in Other Long-term Assets. The CECL for long-term accounts receivable is estimated using the probability of default method and the default exposure due to limited historical information. The exposure of default is represented by the assets’ amortized carrying amount at the reporting date.

The following table sets forth the activity in the Company’s allowance for credit losses:


	As at
	August 31, 2021
Beginning balance as of February 29, 2020	$	9
Impact of adopting ASC 326	4
Prior period recovery for expected credit losses	(3)
Ending balance of the allowance for credit loss as at February 28, 2021	10

Current period recovery for expected credit losses	(1)


Ending balance of the allowance for credit loss as at August 31, 2021	$	9

The allowance for credit losses as at August 31, 2021 consists of $2 million (February 28, 2021 - $3 million) relating to CECL estimated based on days past due and region and $7 million (February 28, 2021 - $7 million) relating to specific customers that were evaluated separately.

There was one customer that comprised more than 10% of accounts receivable as at August 31, 2021 (February 28, 2021 - one customer comprised more than 10%).

Other Current Assets

As at August 31, 2021 and February 28, 2021, other current assets included items such as the current portion of deferred commissions and prepaid expenses, among other items, none of which were greater than 5% of the current assets balance in all periods presented.

Property, Plant and Equipment, Net

Property, plant and equipment comprised the following:


	As at
	August 31, 2021		February 28, 2021
Cost
Buildings, leasehold improvements and other	$	53	$	67
BlackBerry operations and other information technology	93		110
Manufacturing, repair and research and development equipment	71		72
Furniture and fixtures	9		10
	226		259
Accumulated amortization	182		211
Net book value	$	44	$	48

Intangible Assets, Net

Intangible assets comprised the following:


	As at August 31, 2021
	Cost		Accumulated Amortization		Net Book Value
Acquired technology	$	1,023	$	747	$	276
Intellectual property	500		314		186
Other acquired intangibles	494		261		233
	$	2,017	$	1,322	$	695


	As at February 28, 2021
	Cost		Accumulated Amortization		Net Book Value
Acquired technology	$	1,023	$	712	$	311
Intellectual property	498		299		199
Other acquired intangibles	494		233		261
	$	2,015	$	1,244	$	771

For the six months ended August 31, 2021, amortization expense related to intangible assets amounted to $89 million (six months ended August 31, 2020 - $89 million)

Total additions to intangible assets for six months ended August 31, 2021 amounted to $14 million (six months ended August 31, 2020 - $16 million). During the six months ended August 31, 2021, additions to intangible assets primarily consisted of payments for intellectual property relating to patent maintenance, registration and license fees.

Based on the carrying value of the identified intangible assets as at August 31, 2021, and assuming no subsequent impairment of the underlying assets, the annual amortization expense for the remainder of fiscal 2022 and each of the five succeeding years is expected to be as follows: fiscal 2022 - $73 million; fiscal 2023 - $120 million; fiscal 2024 - $110 million; fiscal 2025 - $102 million; fiscal 2026 - $96 million and fiscal 2027 - $88 million.

Goodwill

Changes to the carrying amount of goodwill during the six months ended August 31, 2021 were as follows:


	Carrying Amount
Carrying amount as at February 29, 2020	$	1,437
Goodwill impairment charge (see note 3)	(594)
Effect of foreign exchange on non-U.S. dollar denominated goodwill	6
Carrying amount as at February 28, 2021	849


Effect of foreign exchange on non-U.S. dollar denominated goodwill	(1)
Carrying amount as at August 31, 2021	$	848

Other Long-term Assets

As at August 31, 2021 and February 28, 2021, other long-term assets included long-term portion of deferred commission and long-term receivables, among other items, none of which were greater than 5% of total assets in any of the periods presented.

Accrued Liabilities

Accrued liabilities comprised the following:


	As at
	August 31, 2021		February 28, 2021



Operating lease liabilities, current	30		33
Other	144		145
	$	174	$	178

Other accrued liabilities include accrued royalties, accrued director fees, accrued vendor liabilities, accrued carrier liabilities, variable incentive accrual and payroll withholding taxes, among other items, none of which were greater than 5% of the current liabilities balance.

Other Long-term Liabilities

Other long-term liabilities consist of the long-term portion of finance lease liabilities and non-lease component liabilities related to the Company’s previous Resource Allocation Program entered into in order to transition the Company from a legacy hardware manufacturer to a licensing driven software business.