Description: Insolvencies in Canada were up 22.5% over the same quarter last year. Statistics Canada said this was the largest year-over-year increase in 13 years. During the pandemic, a number of government programs seemed to have helped businesses and consumers to avoid this level of financial difficulty. But the rise of inflation, increasing interest rates, and the end of pandemic subsidies have created added financial pressure on Canadians.

Date: November 9, 2022

Source:  thestar.com

 Link: https://www.thestar.com/business/2022/11/09/consumer-insolvencies-rise-225-per-cent-compared-with-last-year.html?source=newsletter&utm_content=a13&utm_source=ts_nl&utm_medium=email

Discussion points:

1) As you read the article, did it cause you to reflect on your own financial situation at school this year?

2) What do you think might be the single largest factor contributing to the rise in insolvencies?

3) Starting on page 8-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a section on Uncollectible Accounts Receivable. What aspects of this news story might a company have to take into account as it considers its bad debt expense calculations?