Posted by & filed under Accounting Careers, Financial Reporting and Analysis.

Description: Did you know that the Bank of Canada, unlike central banks in a number of other nations, does not hold any gold reserves? About twenty years ago the Bank sold off all of its gold holdings, claiming the cost of holding gold and the higher returns available from foreign bonds made gold a bad investment. On the downside, the value of gold has increased by about 600% during this time while bond returns have plummeted.

Date: November 11, 2022



Discussion points:

1) What do you consider as the most interesting thing you learned from reading this article?

2) If you were a financial advisor within the Bank of Canada would you advise the Bank to begin building up gold reserves once again?

3) In chapter 2 of Wiley’s Financial Accounting: Tools for Business Decision-Making we learn about the classified statement of financial position/balance sheet. If a company was holding gold, where would it appear on the classified statement of financial position?

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