Wiley Accounting Updates

Posted April 10th, 2023 by Brent White & filed under Ethics, Financial Reporting and Analysis.

Description: One of the biggest news items this past week had to be the indictment of former US president Donald Trump in a New York City courtroom. Though there was lots of debate about the event, from an accounting perspective, the interesting notion is that the charges revolve around the falsification of business records. One key element of this type of crime is that it’s not just the act of making the wrong entry onto a document: in addition, the crime requires some intent to deceive in search of a benefit. Examples include companies falsifying financial reports to fool creditors or understating income on tax forms to reduce the amount of tax paid.

Date: April 7, 2023

Source: cbc.ca

Link: https://abcnews.go.com/US/donald-trump-indictment-falsifying-business-records/story?id=98377002

Discussion points:

1) Did you and your classmates follow the news around this first indictment of a former US president?

2) Have you ever been the victim of false statements on a business document or some other important document?

3) On page 10-7 of Wiley’s Understanding Financial Accounting you will find an inset box dealing with ethics related to debt covenants. What might be some types of false statements users of financial statements need to be wary of when the company faces a debt covenant?

Posted April 3rd, 2023 by Brent White & filed under Marketing & Strategy, Student life.

Description: It’s probably not the news you wanted to hear as you wind down the winter term at university and get ready to travel back home for the summer break: WestJet’s pilots’ union is set for a strike vote. Bernard Lewall, a union representative, is frustrated by the results of the last six months of negotiations, noting that “WestJet used to be a place where young pilots wanted to come and work. That’s not the case anymore.” It is not clear exactly when a strike could begin, but the plus for students is that it appears there may be no interruption of travel until around the long weekend in May.

Date: March 31, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/calgary/westjet-pilot-union-alberta-1.6797805

Discussion points:

1) What are your end-of-term travel plans?

2) Have you ever had your travel plans affected by a strike?

3) On page 9-1 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a vignette that discusses WestJet’s launch of a discount carrier known as Swoop, something that is also mentioned in the accompanying article. What are the strengths and the weaknesses of starting up Swoop while also running a regular airline carrier like WestJet?

Posted April 3rd, 2023 by Brent White & filed under Financial Reporting and Analysis, Student life.

Description: Inflationary times have been good times for Dollarama. The rising cost of living has driven customers Dollarama’s way in a search of savings, pushing sales figures about 17 percent higher than in the previous fiscal year. Profits are also up, prompting the discount retailer to pump up the quarterly dividend to its shareholders.

Date: March 29, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/dollarama-retail-earnings-1.6794474

Discussion points:

1) Do you or your classmates rely on Dollarama in your search for savings while at school?

2) Does your school have an investment club or a course where you actually trade stocks? If so, how important is dividend history to your trading choices?

3) Wiley’s Understanding Financial Accounting opens on its first page with a discussion of Dollarama’s growth and how that growth relates to its corporate financial reporting. What do you find interests you most about this vignette?

Posted April 3rd, 2023 by Brent White & filed under Canadian Government, Marketing & Strategy, Student life.

Description: The Government of Canada has approved Rogers takeover of Shaw. The move grants Rogers an even greater share of Canada’s cable and media business. But Rogers mobile phone business will see only limited gains as it picks up the smaller prize, Shaw Mobile, which operates primarily in Alberta and BC. The larger portion of Shaw’s cellular operations, Freedom Mobile, has to be sold to Quebec-based Videotron to satisfy the federal government’s mandate to protect consumers against too much corporate concentration.

Date: March 31, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/rogers-shaw-approval-1.6797175

Discussion points:

1) What do you think of the cellular rates you are paying?

2) How do you think Rogers’ purchase of Shaw will impact the wireless market in Canada?

3) On page 13-4 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we read about Rogers Communications capital expenditures in 2019. How much did the company expend in this category in its most recent fiscal year?

Posted March 27th, 2023 by Brent White & filed under Financial Accounting, Student life.

Description: Blackberry, that Canadian company once known for its namesake phones, is now rebranded as a software and messaging security organization. Consistent with this outlook, Blackberry has sold-off patents it no longer considers part of its core business for the tidy sum of $900 million. Part of the compensation is based on future royalties of up to $700 million.

Date: March 21, 2023

Source: thestar.com

Link: https://www.thestar.com/business/2023/03/21/blackberry-strikes-new-deal-to-sell-portfolio-of-non-core-patents.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) Have you ever used a Blackberry handset?

2) What is your opinion of how this Canadian company has transformed itself in the face of the collapse of its once-famous cellular device?

3) Page 8-29 of Wiley’s Understanding Financial Accounting discusses patents. How long does patent protection last in Canada?

Posted March 27th, 2023 by Brent White & filed under Marketing & Strategy, Student life.

Description: Canada will be getting its first Shake Shack in 2024. The American burger joint has targeted Toronto for its entry into our Canadian market, but it has said it plans to have 35 stores here by 2035. The fast food market in Canada reports growing sales, with the number up 9% in 2022 and 11% in 2021.

Date: March 22, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/shake-shack-expansion-1.6786716

Discussion points:

1) Have you or any of your classmates ever dined at Shake Shack? How does it stack up against the competition?

2) Have you ever thought about opening a restaurant franchise after you graduate?

3) On page 13-66 of Wiley’s Financial Accounting: Tools for Business Decision-Making we see a problem that compares data between two burger giants, McDonald’s and Wendy’s. Do a bit of research to see if you can determine the top five burger competitors Shake Shack will have to face in our market.

Posted March 27th, 2023 by Brent White & filed under Managerial Accounting, Marketing & Strategy, Student life.

Description: Intel co-founder Gordon Moore has died at age 94. In 1965 Moore made a famous prediction that became known as Moore’s Law: essentially, it states that the capacity of computer chips would double every 12 months or so. His rule was expanded to a broader range of technology, sparking the notion that the next generation of technology will make the current one obsolete every 18 months. Moore was known for his modesty, despite his intellectual and business success. As well, he established a charitable foundation that has donated over $5 billion since it began at the start of this century.

Date: March 26, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/gordon-moore-intel-obituary-1.6791176

Discussion points:

1) Were you aware of Moore’s Law or Gordon Moore?

2) When you consider a life like that of Gordon Moore, do you ever pause to think about how it might impact your career story after your graduation?

3) Page 9-3 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we read about a unique competitive advantage Intel has. What strategic advantage does this give the chip-maker?

Posted March 20th, 2023 by Brent White & filed under Financial Reporting and Analysis, Student life.

Description: Canadians are paying 45% more in interest costs than they were last year at this time. With the Bank of Canada raising interest rates to help control inflation, Canadians are facing financial risks unknown to them since the 1990s. The Bank of Canada is keeping an eye on households falling behind on their debt, noting that the volume of arrears on both car loans and credit cards have reached levels at, or above, the pre-pandemic situation. Another area of concern is the number of debtors reaching out to unregulated private lenders for help. On a positive note, overall household net worth is up slightly, primarily due to stock market valuations.

Date: March 14, 2023

Source: financialpost.com

Link: https://financialpost.com/executive/executive-summary/debt-costs-grow-record-pace

Discussion points:

1) How many of your classmates are having to worry about rising interest costs?

2) Have you ever calculated your net worth?

3) Page 10-28, of Wiley’s Understanding Financial Accounting speaks of a ratio that can help us determine a company’s ability to handle interest payments. What two names does this ratio go by?

Posted March 20th, 2023 by Brent White & filed under Accounting Careers, Contemporary Business Issues.

Description: In the early days of the SARS-Cov-2 pandemic, many Canadian companies responded to the requests from the federal and various provincial governments to help fill the need for personal protective equipment (PPE) for our health care workers. But now 90% of those businesses have collapsed as Canadian governments and hospitals have inked contracts with large providers. The president of the industry association representing PPE business owners says “We’ve got an industry that is just running on fumes.”

Date: March 16, 2023

Source: ottawacitizen.com

Link: https://ottawacitizen.com/pmn/news-pmn/canada-news-pmn/the-rise-and-fall-of-canadas-domestic-ppe-market/wcm/15152465-be2b-4d0e-acba-651362d26854

Discussion points:

1) Do you feel our governments should show some loyalty to manufacturers who responded to provide PPE early in the pandemic?

2) Given that we have had the original SARS crisis earlier in the century, followed by the Covid waves of the last three years, how much extra should Canadians be willing to pay to ensure suppliers of PPE are still around for the next crisis?

3) On page 1-7 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we read of the various roles of the chief financial officer. If you were a CFO at a government or a hospital purchasing essential supplies, what criteria would you consider in addressing this issue of PPE procurement?

Posted March 20th, 2023 by Brent White & filed under Canadian governments, Financial Reporting and Analysis.

Description: Several media reported this week on a recent Fraser Institute study on the extent of corporate welfare in Canada. The various business subsidies “come with huge costs to government budgets and taxpayers while doing little if anything to stimulate economic growth,” according to Tegan Hill, a co-author of the report. From 2007 through 2019, the federal government tallied up over $75 million in subsidies, while the provinces kicked in more than to $220 billion. Even municipalities were a big player, with that government sector contributing another $52.1 billion. The study points out that a number of provinces could have cut out their corporate taxes with no impact on the public purse if they had also eliminated their business subsidies.

Date: March 14, 2023

Source: yahoo.com

Link: https://finance.yahoo.com/news/fraser-institute-news-release-federal-090000810.html

Discussion points:

1) Were you aware of the corporate welfare phenomenon? What is your opinion of these subsidies?

2) Have you ever looked around your university town to think about what subsidies might be going to the various businesses around the area?

3) Chapter Thirteen of Wiley’s Financial Accounting: Tools for Business Decision-Making deals with the Statement of Cash Flow. How would a subsidy from government show up in this statement?