Description: Toys R Us may just have received a reprieve from liquidation. Billionaire Isaac Larian, a prominent toy marketer has stepped in with a billion dollar offer to buy up Toys R Us stores in Canada and the United States, Intriguingly, the offer includes a crowd funding component. Keeping the Toys R Us chain afloat appears to be part of a strategy to keep the toy industry healthy.
Date: April 13, 2018
1) Were you familiar with the troubles as Toys R Us? What do you think caused them?
2) How would the crowd funding portion of the purchase be treated in the financial statements of those providing the funding?
3) On page 76 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about a key assumption that is foundational to accounting: the going concern assumption. How would this assumption have been called into question at Toys R Us in recent months?
Description: The general rule is that if something is in demand, then the price goes up. But while employment is growing in both Canada and the United States, and shortages of workers could become a problem as the baby boomers move into retirement, wages have not been growing. Economists have offered a variety of explanations, including such factors as government policy, global competitive factors and weaker trade unions.
Date: April 9, 2018
1) What is the labour market looking like for summer jobs for students at your school?
2) How are wages looking this summer versus last year?
3) The article gives a variety of explanations for the failure of wages to match job growth. Which factor do you think is the most significant?
Description: It was a big week for Facebook this week as founder Mark Zuckerberg headed to Washington to say how sorry he was for the Cambridge Analytics fiasco. But as the Washington Post observed, it seems that Facebook has had a rather long history of saying “sorry” when it comes to issues of data security. It will be interesting in the aftermath of the Congressional testimony to see if political pressure increases for regulation of social media.
Date: April 9, 2018
1) Are you a Facebook user? If so, do you have any concerns around data privacy?
2) If you were an employee at a social media company what perspective would you bring to the strategic tradeoff between data security and the revenue generated from data sharing?
3) On page 34 of Wiley’s Financial Accounting: Tools for Business Decision Making, we see a question about internal and external users of Facebook’s accounting information. What questions might an external user such as a research assistant in a US Senator’s office be asking when looking at Facebook’s financial statements?
Description: Chocolate giant Hershey is spending $500 million in an effort to make its business practices more sustainable. In a program it is calling Cocoa for Good, Hershey wants to direct this half-billion in funding through 2030 to reduce child labour and to increase the sustainability of cocoa supplies. Hershey currently sources 75 per cent of its cocoa from certified and sustainable sources. it hopes to reach 100 per cent by 2020.
Date: April 3, 2018
1) Are you a fan of the Hershey’s chocolate kisses? Were you aware of the Cocoa for Good program? How does it impact your opinion of the company?
2) How could managerial accountants be called upon to help Hershey’s in its pursuit of sustainable sources of supply?
3) On page 321 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read “many companies have moved to streamline their supply chain operations.” What might be some of the challenges Hershey might face in the cocoa supply chain?
Description: Winnipeg Jets fans are excited by their team’s performance this year and are looking forward to the coming playoffs. But if you want to see a game live, that could be a problem. Resellers are already pricing tickets at over $800 U.S. One official with the Jets ownership group calls this “profiteering at its unfettered worst.”
Date: April 4, 2018
1) Have you ever bought a ticket to an event from a reseller? Did you have to pay a high premium?
2) If you were working for the Winnipeg Jets what type of internal controls could you put in place to prevent or detect the reselling of tickets at highly inflated prices?
3) On page 486 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about the value of the NHL’s 13-year deal with Rogers Communications to broadcast NHL games in Canada? How would the NHL account for this deal in its financial statements?
Description: Apple is planning on making its own chips for its Mac computers, perhaps dropping Intel as a supplier. Apple reportedly is responsible for about 5% of Intel’s revenue. By producing its own chips for Macs, Apple could gain the advantage of better integration between its various offerings of hardware and software.
Date: April 2, 2018
1) Are you an Apple user? Why or why not?
2) What might be driving this strategic decision by Apple?
3) On page 259 of Wiley’s Financial Accounting: Tools for Business Decision Making, we read about Apple’s gross profit margin on the iPhone SE. Do you think by making its own chips Apple will change the gross profit margin on its Mac computers?
Description: Once written off for dead, Blackberry stock continues to rise. CEO John Chen has rewritten the Blackberry story by switching emphasis from the hardware market into supply of software. Concentrating on security, Blackberry’s software offers clients data protection in the midst of scary news on the data security front. Hardware now accounts for only about 1% of the company’s revenue.
Date: March 28, 2018
1) Did you ever own a Blackberry?
2) If you were charged with turning around of a company, what would be your first move?
3) In Wiley’s Auditing: A practical approach, we read about how the auditor must evaluate the going concern concept as part of an audit engagement. If you had been the auditor of Blackberry these last few years, what would be some of the factors you would have considered in evaluating the going concern concept?
Description: Not again! Here comes another data breach. This time out Air Canada is revealing that some hotel bookings made by its customers may have been included in a breach of the Orbitz site. Orbitz first reported this data breach on March 20. The size of the problem is relatively small compared to some of the other data breaches we have heard of: Orbitz reported approximately 800,000 of its customers had been impacted.
Date: March 29, 2018
1) Have you ever had your data compromised?
2) What do you think the costs of a breach like this might be?
3) What role might accountants have in helping companies improve their data security?
Description: We are used to hitting Dollarama with a couple of bucks in our pocket to plop down at the cash register while we pick up some low-priced merchandise. It hardly seems to bring to mind images of e-commerce. But now the discount retailer is planning on selling merchandise in bulk via the web, at least on a trial basis. The move from bricks and mortar to the e-world should be an interesting one.
Date: March 29, 2018
1) What do you think of this decision by Dollarama to expand into e-commerce?
2) What might be some of the financial accounting changes that Dollarama would implement to track the success of this new e-commerce decision?
3) On page 304 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can how the Dollarama transitioned from a manual to an electronic inventory system in 2012. What would have been some of the challenges it would have faced prior to switching to an electronic system?
Description: In the light of the controversy surrounding Cambridge Analytics’ use of Facebook user data during the 2016 U.S. election, users are dumping Facebook in a #DeleteFacebook movement. One organization benefiting from the #DeleteFacebook trend is Mastadon. Mastadon – https://mastodon.social/about – is a decentralized social network, meaning its users, in effect, operate the network. And its code is open-source, meaning anyone can see the magician behind the curtain. Mastadon added over 5,000 new users on Monday and Tuesday as the Facebook bad news broke. But Mastadon’s user base, at slightly over a million, is a long way from Facebook’s two billion users.
Date: March 23, 2018
1) Were you aware of the Facebook/Cambridge Analytics controversy?
2) Would the risk over the disclosure of your personal data prompt you to consider a switch to Mastadon or to just simply delete your Facebook account?
3) On page 597 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can read about what type of payoff investors are looking for when they buy Facebook shares. Does this help explain the decline in Facebook’s share price this week?