Where Are They?

Posted by & filed under Accounting Careers, Financial Accounting.

Description: The federal government might well be asking the question “where are they?” when it comes to large Canadian companies seeking government assistance in this Corona world. In order to assist in the economic troubles associated with the virus, the government created the Large Employer Emergency Financing Facility (LEEFF) . But so far only about a dozen companies have even bothered to apply, with a minuscule total of two companies having actually received the loans.

Date:  October 15, 2020

Source:  thestar.com

 Link: https://www.thestar.com/news/canada/2020/10/22/just-two-companies-have-been-approved-for-ottawas-emergency-covid-19-loans-where-are-the-rest.html?source=newsletter&utm_content=a01&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_34244

Discussion points:

1) Are you surprised by the low uptake on the LEEFF? Why do you think the participation is so low?

2) If you were an accountant working for this program, what recommendations would you make to help improve the results?

3) The story tells us that Air Canada did not respond to The Star‘s request for a response on this story. On page 4-18 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we can read about how Air Canada accounts for cash it receives from ticket sales prior to the time of the actual flight. What do you think might be going on with this number on the financial statements during the Covid times?

Found: Missing Painting

Posted by & filed under Financial Accounting.

Description: A painting by artist Jacob Lawrence, apparently missing for the last 60 years, was rediscovered recently on a good hunch from a visitor to the Metropolitan Museum of Art. When viewing an exhibit of a series of Lawrence’s paintings, the visitor took note of the empty spots on the wall where the missing paintings from the series would go. Having a hunch that a painting hanging in the home of two friends may well be of the missing pieces, she approached the couple. Now, the painting they purchased for a small sum at a charity auction many years ago has been reunited with the series.

Date:  October 21, 2020

Source:  nytimes.com

 Link: https://www.nytimes.com/2020/10/21/arts/design/jacob-lawrence-painting-found.html

Discussion points:

1) Does your university campus have an art gallery? When did you last visit it?

2) If you were the elderly couple noted in the story, would you have reunited a painting you purchased legally with the collection? Why or why not?

3) In Chapter 6 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we learn three approaches to placing a cost on items in inventory. If you were an accountant for an art dealer, which inventory cost formula would you be likely to use? Why?

The End of Double-Cupping

Posted by & filed under Marketing & Strategy, Student life.

Description: Last week in this blog there was a story on Apple’s move to reduce waste by no longer shipping a charger block with its new iPhone 12 models. This week Tim Horton’s picked up on the theme by announcing it would no longer double-cup your hot beverage. Don’t panic though; the coffee chain will still give you a cardboard sleeve to protect your hand from the heat of the double-double.

Date:  October 21, 2020

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/tim-hortons-1.5770740

Discussion points:

1) Are you a Tim Horton’s fan? Is there a Tim’s outlet on your campus?

2) What strategic factors do you think Tim’s looked at in making this decision?

3) On page 9-27 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you will read about franchises, something that is a key part of Tim Horton’s business model. If you purchased a franchise for a Tim Horton’s, where would you place this asset on your balance sheet? Would you amortize it?

Covid and Taxes

Posted by & filed under Canadian Government.

Description: There is no question that Canadian governments are spending borrowed money at a prodigious rate during this pandemic in order to support citizens and keep the economy moving. In an opinion piece in the Toronto Star, Daniel Tsai, a former government advisor who now lectures at Ryerson, says that throwing on a new series of taxes to pay down the debt would not be the way to go. Tsai argues that there is a need for non-partisan government and business experts to develop strategies on how to proceed.

Date:  October 9, 2020

Source:  thestar.com

 Link: https://www.thestar.com/business/opinion/2020/10/17/a-sudden-raft-of-taxes-to-pay-for-covid-19-would-be-a-mistake.html

Discussion points:

1) What increased government spending have you noticed during the pandemic?

2) What stood out to you in reading this article?

3) One of the options for increased government revenues is in increasing sales taxes. Wiley’s Financial Accounting: Tools for Business Decision-Making, discusses how companies account for the collection of sales taxes (see Chapter 10). What are the journal entries to show the collection of sales tax at the time of sale and the later remittance of that tax to the government?

Apple Cuts e-Waste?

Posted by & filed under Sustainable Development.

Description: It’s often an exciting time when Apple unveils a new iPhone, and this past week seemed true to form as Tim Cook introduced the iPhone 12. One surprise for some was that Apple is not going to be including any charging adapters or earbuds with the smartphones. With so many chargers and headphones already owned by potential users, Apple saw this move as one to cut electronic waste. The articles does note, however, that this will make a very small contribution to solving the problem.

Date:  October 16, 2020

Source:  wired.com

 Link: https://www.wired.com/story/apple-iphone-no-charger-gallium-nitride/

Discussion points:

1) Are you an Apple user or not? Why?

2) What do you think of this move by Apple to reduce e-waste?

3) In Wiley’s Financial Accounting: Tools for Business Decision-Making, Chapter 5, we can read how some business sectors are generally “low gross margin” while others are “high gross margin.” In which sector does Apple fall?

Still Rising

Posted by & filed under Student life.

Description: The Corona virus crisis has been bad news for certain business sectors, but you can’t say that about real estate. The market continues to be red hot with the Canadian Real Estate Association’s declaration that home prices are up 17% in this past year. Some have suggested that with the virus keeping more families at home for work and school, a desire for more living space may be one reason for the sharp rise.

Date:  October 15, 2020

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/crea-september-1.5763101

Discussion points:

1) Are you planning to buy a home after you finish university? How will this rise in price impact you?

2) Has your university community seen an increase in cost for student rentals given this rise in real estate prices?

3) In Wiley’s Financial Accounting: Tools for Business Decision-Making, we know that normally a long-term asset like a house would be treated as property, plant and equipment. If you were a home builder, however, and you had several homes for sale, where would these be found on your statement of financial position?

Back to Orange

Posted by & filed under Student life.

Description: New Brunswick and its Maritime cousins, PEI and Nova Scotia, have been the envy of other parts of Canada due to their deft handling of the Corona virus crisis. But this past week, two health zones in New Brunswick were placed back in orange status, after weeks of relative freedom under the yellow banner. This means some businesses, like hair dressers and gymnasiums, will have to close shop, and social visits will be restricted to two-family bubbles.

Date:  October 9, 2020

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/new-brunswick/covid-19-new-brunswick-update-friday-higgs-russell-1.5756730

Discussion points:

1) What phase or colour is your university community in?

2) Has your university campus been impacted by a change in status during this school year? How has it impacted your campus?

3) In Wiley’s Financial Accounting: Tools for Business Decision-Making, we learn very early on about the concept of prepaid insurance. Think of vendors like hairdressers and gymnasiums who are impacted by shutdowns like this. Is there any insurance product that would protect them from the impacts of a pandemic? (Hint: perhaps do a bit of a search to see if pandemic insurance exists).

Pilots Take a Cut

Posted by & filed under Canadian Economy.

Description: WestJet pilots have agreed to take a 50% pay cut to keep more of them working during these interesting times. Though WestJet originally thought the effect of the pandemic on air travel would force a reduction of about 1,200 staff, the pilots’ offer has cut the number to around 450. Actions like this across the economy are helping to keep highly trained employees in their companies until the situation turns around.

Date:  October 5, 2020

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/westjet-alpa-compensation-1.5748468

Discussion points:

1) Would you be willing to take a 50% pay cut to save your fellow-workers’ jobs?

2) Why is it so important for businesses to keep highly-skilled people employed?

3) The opening vignette of Chapter 9 in Wiley’s Financial Accounting: Tools for Business Decision-Making, tells us how WestJet depreciates various components of its airplanes. Do you think WestJet could make a case for charging less depreciation in 2020 on some of its aircraft components?

Taking on the Giant

Posted by & filed under Accounting Careers.

Description: Canada’s competition bureau is taking on Amazon, the giant of the retail world that has only grown stronger during the Covid-19 period. The basic problem, as has been observed by US Senator Elizabeth Warren, is that Amazon owns the marketplace, and the company sells its wares in that same market. This conflict of interest causes concerns around the pricing of its goods versus other sellers in the market, and, about how Amazon may be sharing customer information across its various structures, such as Alexa, Whole Foods, and the regular Amazon online store. Former Amazon V.P. Jeff Bray has said “Amazon’s strategy of growth over profits doesn’t make any sense at all, unless your end goal is to become monopolistic in size to point in which you regain pricing power.”

Date:  October 11, 2020

Source:  thestar.com

 Link: https://www.thestar.com/business/opinion/2020/10/10/the-competition-bureau-needs-to-come-up-with-recommendations-that-target-the-inherent-conflict-of-interest-around-third-party-sellers-head-on.html

Discussion points:

1) Have you been using Amazon’s services more in recent months?

2) What did you find was the most interesting part of the article for you?

3) Did you ever think about the title of your accounting text, Wiley’s Financial Accounting: Tools for Business Decision-Making? What tools from this text could accountants apply in assisting the Competition Bureau in this examination of Amazon?

CRA wants to do your taxes

Posted by & filed under Personal Tax.

Description: The Canada Revenue Agency (CRA) wants to do your taxes. That might save you some time and labour, but it doesn’t please everyone. In Britain and France where such a system has been tried, it has delivered some questionable results. And given that a 2017 report by the Auditor General of Canada said that over 50% of the time calls to the CRA were not even answered, it might be fair game to question the idea of the ability of this agency to take on additional responsibilities.

Date:  October 2, 2020

Source:  financialpost.com

Link: https://financialpost.com/opinion/opinion-the-cra-can-barely-answer-phone-calls-now-it-wants-to-do-our-taxes-for-us

 

Discussion points:

1) How much time do you spend each year doing your taxes?

2) Would you be willing to rely on the CRA to do your tax return and let you know the size of your refund or amount owing?

3) Chapter One of Wiley’s Auditing: A Practical Approach, discusses several types of audits that auditors can perform. What type of audit do you think the Office of the Auditor General was conducting when it discovered the problems at the Canada Revenue Agency?