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?