Description: Now that was a costly injection: the head of the organization investing your Canada Pension Plan resigned last week after news broke that he had received a Covid-19 vaccine in Dubai. Mark Machin has said this trip to the Middle East was for personal reasons, but the timing of his trip comes with repercussions. The federal government has been urging Canadians to refrain from overseas travel, so perhaps this factored into his discussions with the Canada Pension Plan Investment Board (CPPIB) that preceded his resignation.
Date: February 26, 2021
1) Do you know anyone who has traveled outside Canada in this time where the federal government is urging Canadians not to?
2) Do you know anyone who has received a Covid vaccination? Have there been any vaccination clinics on your campus?
3) In Wiley’s Auditing: A Practical Approach, in Chapter Two we read of a four-part ethical framework to guide decisions. Imagine for a moment that you are an executive facing the choice of travel outside of Canada during this Covid time. Apply this framework to this hypothetical situation and make your decision accordingly.
Description: Nothing to see here, at least for the Office of the Auditor General of New Brunswick when it tries to find out about taxpayer money inside a government-created entity called Vestcor. Vestcor was legislated into existence by the Province in 2016, changing the organization managing pensions for civil servants into a private organization. It is no longer considered a Crown-corporation accountable to legislators, and, ultimately, the citizens of NB. The Auditor General wants to look into the organization for a variety of reasons, one of which is to see why it is paying some extremely generous salaries and bonuses to Vestcor management. The CBC reported that the President of the organization reportedly made close to $1.4 million in 2018.
Date: February 24, 2021
1) What do you think of this controversy? Do you think the Auditor General should be granted access?
2) In what circumstances would it make sense for a government to establish a private corporation that would not be subject to an auditor general’s review?
3) On page 2-9 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we are introduced to the notion of pension and benefit obligations. Check out the public accounts (the financial statements) of your home province to determine how it accounts for its pension and benefit obligations to its employees.
Description: For the last year or so, grocery stores have done quite well. Shuttered restaurants boosted sales at grocers as consumers were unable to eat out as they had been doing pre-Covid. Loblaws has reported its sales are up 10% over the previous year, but expectations are that 2021 will not see the same levels of sales. Online sales are way up, but Loblaws points out that there are additional cost factors associated with online sales.
Date: February 25, 2021
1) How have your dining habits changed over the past year? Are you spending more at grocery stores and less at restaurants?
2) Imagine yourself in a senior accounting role at a grocer such as Loblaws. What are some strategies you might propose to help prepare the company to deal with the expected decline in sales in 2021?
3) Chapter 5 of Wiley’s Financial Accounting: Tools for Business Decision-Making, begins with a short vignette about Loblaws. What is the chief difference between the “stock and ship” model and the “flow model” of supply-chain management?
Description: In an extraordinary week of cold weather, Texas has been dealing with a crisis. Power failures left many Texans in the cold, then freezing water pipes and crippled water treatment plants created a shortage of clean drinking water. This crisis may prompt governments and utilities in North America to consider just how resilient our infrastructure is in dealing with extreme weather events.
Date: February 19, 2021
1) Have you ever lost your power for an extended period due to extreme weather? How did you deal with it?
2) If you were an executive at an electric utility, what lessons do you think you might learn from the troubles in Texas this past week?
3) Chapter 9 of Wiley’s Financial Accounting: Tools for Business Decision-Making deals with reporting of long-lived assets. Do some research with your classmates to determine what range of useful lives electric utilities are using in depreciating their electrical grids.
Description: Facebook is apparently unhappy with Australia’s efforts to have tech companies pay for news content on its feeds. In effect, Facebook has blocked sharing of Australian news on the platform in an attempt to convince Australia’s parliament that it has taken the wrong path. Don Pittis of CBC News wonders if Western democracies will have to come up with some sort of joint action to deal with the tech giants.
Date: February 19, 2021
1) Were you aware of this controversy? What is your opinion of the action taken by Facebook?
2) What do you think Western democracies should do to address the decline of the traditional news media?
3) On page 8-12 of Wiley’s Financial Accounting: Tools for Business Decision-Making, the inset “Accounting Matters” box discusses a controversy around using social media, like Facebook, to attempt to reach consumers who are overdue on their accounts. If you were a credit manager trying to collect on overdue receivables what methods might you use?
Description: There have been numerous stories in the media recently letting Canadians know that they will be taxed on benefits provided by the federal government during the COVID crisis. Benefits such as the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) did not have tax removed at source, meaning Canadians who have received them may have to do some juggling when taxation time rolls around. Jamie Golombek of CIBC Wealth Management offers advice on how a contribution to an RRSP might help you cut the amount you owe to the federal government.
Date: February 19, 2021
1) Did you receive the CERB, the CESB, or any similar benefit from the federal government in 2020?
2) Have you made any contributions to an RRSP previously? Could a contribution before the March 1 deadline help you reduce or eliminate any tax payment on your total income for 2020?
3) Wiley’s Financial Accounting: Tools for Business Decision-Making, deals with the subject of payroll liabilities beginning on page 10-6. Read this section of the text and determine what accountants mean by the phrase “at source.”
Description: Bitcoin is soaring to new heights. Tesla has said it will soon accept the cryptocurrency as payment for its electric cars, and, as part of this strategy it has salted away $1.5 billion worth of Bitcoin. This is seen as part of the reason that Bitcoin has jumped 50% this year.
Date: February 8, 2021
1) Do you know anyone who has invested in Bitcoin? What price did they pay?
2) The article notes that some see Bitcoin as “a store of value” at a time when governments have been borrowing heavily to combat the pandemic. If you were a chief financial officer at a company, would you be willing to recommend an investment in Bitcoin?
3) Read the inset box “What is Cash?” in Wiley’s Financial Accounting: Tools for Business Decision-Making. Do you believe Bitcoin should be accounted for as cash on a company’s balance sheet?
Description: In a recent blog post, Brad Smith, President of Microsoft, brought some good news to the traditional news media. Smith’s frank statement – “But one thing is clear – the internet and social media have not been kind to the free press” – seems an apt summary for how the internet has strangled revenue sources of traditional media. Microsoft said it shares revenue with media outlets and it supports an Australian legislative effort to level the playing field between media companies and the tech giants like Facebook and Google.
Date: February 12, 2021
1) How do you get your news?
2) Do you live in what the article calls a “news desert?” Are these “deserts” a threat to democracy??
3) In Wiley’s Financial Accounting: Tools for Business Decision-Making, we see an interesting problem P13.8B that deals with some other policy differences between Alphabet (Google’s parent company) and Microsoft. Answer part “b.” of the problem: that is, “Why do you think Microsoft has paid dividends while Google has not?”
Description: Despite the tough times for many businesses during the pandemic, Under Armour showed strong quarterly results in recent reporting, with revenue exceeding expectations. Under Armour, like some of its competitors in the athletic wear segment, is trying to take advantage of the workout at home boom in a time of social isolation. E-commerce sales were up about 25% during the quarter, contributing to the positive news.
Date: February 9, 2021
1) Have you purchased any Under Armour products online?
2) What is your opinion about Under Armour’s recent marketing strategies?
3) In Wiley’s Financial Accounting: Tools for Business Decision-Making, we see a practice case on pages 6-31 and 6-32 regarding Under Armour’s inventory management and overall liquidity. Do some research and answer part “b.” of the problem using the financial information from the most recent two fiscal years.
Description: E3 Metals Corp. from Calgary is exploring a technique to remove lithium from Alberta’s old oil wells. E3 is testing methods to extract this valuable mineral, a key component in batteries for electric cars. Lithium prices are somewhat volatile, with price gains of 40% in January. With the electric vehicle market experiencing growth, E3’s timing could be right.
Date: February 5, 2021
1) Do you know anyone with an electric vehicle? Would you consider buying one yourself after graduation?
2) Would you be willing to invest in E3 or a similar company in the lithium extraction business?
3) In Wiley’s Financial Accounting: Tools for Business Decision-Making, we learn about the differences between research expenses and development costs. (See page 9-26.) How should E3 be accounting for its current spending on the lithium extraction – i.e. research expenses or development costs?