Description: Hudson’s Bay Company is going beyond the retail sales stream in an effort to add value to its business. The company announced it has entered into joint ventures, one with an American company and the other here in Canada, in an effort to cash in on value locked in its real estate assets. The joint venture arrangements will generate cash for Hudson’s Bay that can be applied to reducing its debt.
Source: Globe and Mail.com
Date: February 25, 2015
1) What is your opinion of this strategic move by Hudson’s Bay?
2) How will Hudson’s Bay Company have to account for the debt raised by the joint ventures?
3) What are some of the key issues in joint venture accounting?