The Lipstick Index

Posted by & filed under Canadian Economy, Student life.

Description: The Lipstick Index is perhaps one of the most unusual measures of economic performance you may have encountered. Essentially, this measure says that when times are tough, consumers will still avail themselves of smaller luxuries like skin care and perfumes in the face of cut backs on larger purchases. Leonard Lauder, the former CEO of cosmetic firm Estée Lauder, was the first to coin the term. Economists at California State University established the phenomenon was confirmed by economic data emerging from the 2008 financial crisis recession .

Date:  November 29, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/calgary/lipstick-index-beauty-sales-1.7041218

Discussion points:

1) Had you ever heard of this Lipstick Index?

2) Do you think the principles of the Lipstick Index are valid in the lives of you and your classmates?

3) Page 5-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making introduces us to Loblaw’s subsidiary corporation Shoppers Drug Mart. What percentage of Shopper’s revenue comes from its cosmetics trade?

News Deal with Google

Posted by & filed under Accounting Careers, Canadian Government.

Description: The government of Canada and online giant Google have finally reached a deal regarding use of Canadian news on the web. The deal comes three weeks before the federal government’s Bill C-18, the Online News Act, comes into effect. Google has agreed to pay $100 million a year to Canadian news organizations for use of their content on its powerful platform. The other large holdout – Meta (Facebook) – has left the negotiating table without indicating when, and if, it may return.

Date:  November 29, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/politics/google-online-news-act-1.7043330

Discussion points:

1) How do you and your classmates get your Canadian news?

2) If you were an accountant tasked with distributing the $100 million to Canadian news organizations, what model do you think you would recommend?

3) Early in chapter one of Wiley’s Financial Accounting: Tools for Business Decision-Making we are given information about a number of famous Canadian accountants. What is the name of the Canadian accountant who serves as country manager for Google Canada?

Crunch Time for Ontario Universities

Posted by & filed under Accounting Careers, Canadian governments.

Description: Universities in Ontario are banding together to try and find cost savings through efforts like joint procurement and combining course offerings, all in the shadow of provincial government pressures to find efficiencies before they will be allowed to increase tuition fees. But the Council of Ontario Universities stated the fiscal situation is becoming “increasingly untenable,” with several schools facing very large deficits. Jill Dunlop, the government minister responsible for universities has received a report from a high-profile panel that recommends a 10% increase in the grants to universities along with a 5% tuition increase. Dunlop’s panel included a look at university administrative costs as part of its review, noting that this area has “considerable room for improvement.”

Date:  December 1, 2023

Source:  thestar.com

 Link: https://www.thestar.com/politics/provincial/ontario-universities-are-running-out-of-money-and-time-report-says/article_7f7c8925-173c-5f57-8411-836283a5d44b.html

Discussion points:

1) Are you a student at an Ontario university? If so, how have these financial issues impacted you?

2) Do you think the Ontario government has been correct in insisting on increased efficiency in the university sector?

3) Pages 4-1 and 4-2 of Wiley’s Financial Accounting: Tools for Business Decision-Making talks about accounting at Western University in London, Ontario. What are the various types of revenues and expenses for a university that are mentioned in this vignette?

Our Tax Dollars; Korean Jobs?

Posted by & filed under Accounting Careers, Accounting Principles.

Description: The governments of Canada and Ontario are taking some heat after revelations that 1,600 workers from South Korea will be arriving in Windsor, Ontario to install equipment at the NextStar battery plant. Canadians may be rightly concerned, as the provincial and federal governments have contributed billions to bring the battery plant and the related jobs to Southern Ontario. Danis Lee, the CEO of NextStar, has noted, however, that the company will be hiring thousands of Canadians.

Date:  November 20, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/windsor/stellantis-lg-energy-nextstar-electric-vehicle-battery-1.7033732

Discussion points:

1) Do you think that the NextStar battery plant should be allowed to bring in so many temporary foreign workers during the construction phase?

2) What do you think of our governments investing our tax dollars to create jobs?

3) Page 9-5 of Wiley’s Financial Accounting: Tools for Business Decision-Making tells us about various costs that can be capitalized in the construction of a building, such as manufacturing facility. What type of accounting treatment is acceptable for the interest costs on any borrowing for such a project?

Is Self-checkout in Trouble?

Posted by & filed under Fraud, Internal control, Student life.

Description: The self-checkout may be in a bit of trouble as some retailers are reconsidering the future of this mode. Increased losses due to shoplifting is certainly a factor for retailers to consider. Adrian Beck of the University of Leicester has studied self-checkouts for over ten years, and he notes they may account for one quarter of shoplifting per grocers’ estimates. While some Canadian Walmarts still have self-checkout, in 2018 the U.S. side of the retail giant cited “unacceptable losses” and pulled its ‘scan-and-go’ checkout.

Date:  November 24, 2023

Source:  ctvnews.ca

 Link: https://www.ctvnews.ca/business/big-box-retailers-are-rethinking-their-self-checkout-strategies-here-s-why-1.6659795

Discussion points:

1) Are you a regular user of self-checkout?

2) Some consumers like the convenience of self-checkout. Those of a different viewpoint say they miss the human interaction with a cashier, and, still others feel they are being forced to take-on unpaid work, so to speak. What do students in your classroom think?

3) Page 1-16 of Wiley’s Managerial Accounting: Tools for Business Decision-Making discusses Walmart’s relationship with its suppliers. What tool does Walmart use to evaluate its suppliers’ performance?

New Limits on RESPs

Posted by & filed under Accounting Careers, Student life.

Description: If you are post-secondary education student benefiting from of a Registered Education Savings Plan (RESP), you may have some good news for your finances. The federal government has upped the amount full-time students can withdraw from the education assistance payments (EAP) portion for their first 13 weeks of study from $5,000 to $8,000. The EAP represents the government’s contribution to the RESP above the principal portion contributed by parents or grandparents. After those initial 13 weeks, the cap comes off; students in full-time academic study can use as much of the EAP as required. While the EAP is taxable to the student, the principal portion is not as the contribution comes out of the parents’/grandparents’ after-tax funds.

Date:  November 26, 2023

Source:  financialpost.com

 Link: https://financialpost.com/personal-finance/how-students-more-money-post-secondary-school

Discussion points:

1) How many of your classmates are the beneficiary of a RESP? Were you aware of this positive news regarding the EAP?

2) The article noted roughly 50% of families with children under 18 have signed up for RESPs. If you were advising a government minister who wanted to expand the uptake of these plans, what would you recommend?

3) Chapter 4 of Wiley’s Financial Accounting: Tools for Business Decision-Making opens with a vignette about how Western University in London, Ontario deals with the closing of its books at its April 30 year end. How does Western deal at year end with fees paid for the upcoming intersession?

No Strike at No Frills

Posted by & filed under Accounting Careers, Marketing & Strategy, Student life.

Description: A last minute deal has averted a strike at discount grocer No Frills. Union President Lana Payne said the new “agreement delivers pattern wages and many other improvements for our members.” An immediate raise of $1.50 an hour appears to be one of the gains. The union had noted that it has been a very profitable time for the grocery chain and that some of this profit needed to be shared with the labour force that helped earn it.

Date:  November 19, 2023

Source:  ctvnews.ca

 Link: https://toronto.ctvnews.ca/strike-averted-at-17-no-frills-stores-in-ontario-1.6651532

Discussion points:

1) Do you and your classmates rely on discount grocers like No Frills?

2) Do you think that ongoing labour activity by groups like these No Frills employees, the Hollywood writers, the automaker unions, and the Starbucks red cup day walkouts seem to indicate a strengthening of labour’s power in the economy?

3) Page 5-1 of Wiley’s Financial Accounting: Tools for Business Decision Making introduces us to Loblaw Companies Limited and a number of its “food banners,” such as No Frills. What strategic advantage could the company be seeking in marketing its retail operations under more than one banner?

“Here is how platforms die” – The We Work Story

Posted by & filed under IPO, Marketing & Strategy, Risk management.

Description: Like a number of other highly-hyped organizations, We Work, a company that was supposed to reinvent the office by giving temporary space to the workforce, has failed. We Work tallied up $16 billion in losses since introducing its first location in New York in 2010. John Andrew, a real estate consultant, said that “They were up to their eyeballs in debt, and then we know what happened with interest rates.” Tech writer and sci-fi novelist Cory Doctorow has seen this show before, describing tech hype ending in disappointment as “Here is how platforms die.”

Date:  November 19, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/armstrong-start-ups-wework-uber-1.7032264

Discussion points:

1) As pointed out by Cory Doctorow, have you or your classmates ever felt abused as a user of a new platform that did not live up to its promise?

2) As suggested by John Andrew, do you think a company like We Work might actually have a path to success in the post-pandemic world?

3) Page 11-7 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the concept of the IPO – Initial Public Offering. What journal entry does a company make to record the issue of shares through an IPO?

A Good Year for the Wealthy

Posted by & filed under Canadian Economy, Canadian Government.

Description: According to Statistics Canada, 2021 was a good year for the wealthy. Canada’s top 1% of income earners saw their incomes go up by 9.4% that year, with the top 0.1% doing even better with an increase of 17.4%, pushing them to an average of nearly $2.1 million. Statistics Canada noted similar increases were seen following the financial crisis of 2008.

Date:  November 13, 2023

Source:  thestar.com

 Link: https://www.thestar.com/business/canadas-richest-1-saw-largest-leap-in-annual-income-in-years-while-lower-earners-wages/article_2f9dc18a-d812-5cf1-b6a9-565dcce174e6.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) Were you aware of these income trends?

2) Do you see these type of trends as a potential point of concern in a democracy?

3) Page 1-5 of Wiley’s Financial Accounting: Tools for Business Decision-Making introduces us to the role of the Canada Revenue Agency (CRA). Do you think the CRA could have a role in providing the Canadian citizens with more understanding regarding top income earners and the sources of their income?

International Accounting Day

Posted by & filed under Accounting Principles, International Accounting.

Description: Friday, November 10, was International Accounting Day. For a discipline that is used to operating out of the limelight, this is one day of the year that focuses on what exactly it is that accountants do. Accounting can be traced back thousands of years to the ancient civilization of Mesopotamia. International Accounting Day comes from the anniversary of the publication of a 15th century seminal work on accounting.

Date:  November 10, 2023

Source:  livemint.com

 Link: https://www.livemint.com/news/international-accounting-day-know-history-significance-and-relevance-of-accountants-contribution-to-business-economy-11699579735402.html

Discussion points:

1) Are you interested in a career in accounting?

2) The article tells us a bit about the history of accounting. Do you think accounting courses should have more of a historical dimension?

3) Page 2-21 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses the work of the International Accounting Standards Board (IASB). What is the job of the IASB?