Description: Welcome back to another academic year of Wiley’s Weekly Accounting Updates. And if you are at Dalhousie University (or King’s College) in Halifax, you might find your welcome back to campus has been accompanied by the presence of the Halifax police. A police program in force since 2004 sees enhanced patrols around the two schools to provide education, prevention, and – where required – enforcement. There’s a rather unique cost-sharing arrangement in place for this operation Fall-Back, with the police force providing the assets (the police cruisers) and Dalhousie picking up the cost of the force supplying the police officers. No mention was made in the story of the costs of fuel and other operating expenses.
Date: September 5, 2017
1) What are the first few days around your campus like? Do you think an enhanced police presence would be useful?
2) What is your opinion of the cost sharing arrangement between Dalhousie University and the police force?
3) The story says “the university will pay for officers to patrol the area during peak times and dates throughout the year.” Put yourself in the position of an accountant working for the police force. What would you include as the costs for the officers patrolling the area if you were preparing to invoice Dalhousie University?
Description: After years of cuts and restraint on interest rates, on Wednesday the Bank of Canada raised interest rates for the second time in three months. The Bank’s move sparked a rally in the loonie, with the Canadian dollar rising to its highest level in two years versus the United States dollar. The Bank appears to be optimistic that Canada’s economy is bouncing back after having endured some shocks from the collapse of oil prices a couple of years ago.
Date: September 7, 2017
1) What do you think about a rise in interest rates? How does it affect you as a student?
2) Can you find a reference to interest in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Seventh Canadian Edition? Where?
3) What items in a company’s financial statements may be impacted by a rise in interest rates? Take a look at the financial statements featured in Chapter One of Wiley’s Financial Accounting: Tools for Business Decision-Making, Seventh Canadian Edition. Perhaps divide your class into teams and see which team can find the most items impacted by interest in five minutes.
Description: And here comes another online security breach. Thursday Equifax, a credit rating agency, announced that a data breach has affected over 140 million consumers. While most of these live in the United States, a number of British and Canadian consumers may also have had their sensitive data compromised. One thing Equifax has offered is a free year of credit monitoring and identity theft insurance protection. Wired magazine says “take it.”
Date: September 7, 2017
1) What does a credit score mean? Why do businesses use credit scores?
2) Why do you think hackers have targeted Equifax?
3) Have you ever had your online data compromised?
Description: Netflix‘s earnings per share exceeded the analysts’ estimates in its recent report on the first quarter. Conversely, the number of new subscribers was below what analysts had predicted. Overall, Netflix seems profitable with net income up to $178 million, an increase of about $150 million. The stock has been doing quite nicely, with the share price up close to 20% in 2017.
Date: April 17, 2017
1) Are you a Netflix subscriber? Why?
2) What can you find out about earnings per share and the price-earnings ratio in Wiley’s Kimmel, Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition?
3) Why is the Earnings per Share ratio a tricky one to use in evaluating a company’s ratios?
Description: It’s probably news that Canadian dairy farmers did not want to hear. While visiting Wisconsin, U.S. President Donald Trump promised he would stand up for dairy farmers in that dairy state, criticizing current trade rules as unfair. Meanwhile, the dairy sector in Australia, New Zealand and Mexico welcomed the thought of attacking the Canadian dairy industry through the World Trade Organization.
Date: April 19, 2017
1) The article speaks about a deal that prices the ingredients for cheese-making below cost. Why would industry price ingredients below cost? Doesn’t that seem like a way to go out of business?
2) If you were providing financial advice to a Canadian dairy farmer, what might be some strategies you would recommend to help compete with the farmers from other nations?
3) Do you think that the threats from the U.S. and other nations will end up in big changes for Canadian dairy farmers?
Description: You’ve probably seen that viral video of the passenger being dragged off of the United Airlines flight. United has been taking more than a few shots in social media on this one, and perhaps the impact will be felt on its bottom line. And in the past week or so, we have seen discussion in Canada about Air Canada having disappointed passengers through the so-called bumping practice, including the bumping of a PEI family on a long-planned trip to Costa Rica. Federal Transport Minister Marc Garneau has said changes are coming to better protect Canadian air travelers.
Date: April 17, 2017
1) Have you ever found yourself the victim of overbooking on an airline flight? What happened?
2) Do you think the practice of bumping is ethical? Why or why not?
3) Do you think the recent overbooking stories will have a financial impact on the airlines involved?
Description: In the battle of the two giants, ride service Lyft raised $600 million to help it continue the market share struggle against the bigger Uber. Both of these taxi-supplanters are continuing to grow. Uber, however, is facing a few incidents of bad publicity, including the release of a video showing an executive in an unfavourable light.
Date: April 11, 2017
1) Have you or any of your classmates used both Lyft and Uber? How do they compare?
2) Which of these two companies do you think will emerge as the dominant one in the industry?
3) The article mentions that pension funds and sovereign wealth funds are now looking to private companies such as Lyft rather than public companies. Why do you think they are making these investments?
Description: It’s a bit of a mystery. The average age of new permanent employees joining the public service is 37. That seems a bit long in the tooth, don’t you think? This is causing some to conclude that millenials are avoiding the public service of Canada. This does not bode well for the level of talent the public service can provide to help meet Canada’s challenges.
Date: April 10, 2017
1) If you graduating, have you considered a career in the public service? Why or why not?
2) What kind of roles might be available for accountants in the public service?
3) What does the coming retirement of so many baby boomers mean for the composition of the public service?
Description: Tax reform in Canada is a topic in the air as Conservative Party candidates vie for the leadership post and talk of tax reform under U.S. President Trump spurs conversations around Canadian competitiveness. National Post columnist Andrew Coyne contends that it has been over 30 years since Canada has seen significant tax reform. Mr. Coyne argues that various problems with calculating income can be addressed by enacting a system based on a personal consumption tax and a corporate net cash flow tax.
Date: April 10, 2017; updated April 11, 2017
1) If Mr. Coyne’s ideas were adopted, would this lessen the focus on corporate income statements and increase the visibility of cash flow statements?
2) What impact would these changes have on employment of accountants?
3) How likely is it that the federal government will go ahead with these changes?
Description: With an overheated housing market in Toronto, Canadian Finance Minister Bill Morneau is set to meet with provincial and municipal officials to develop ideas on how policy makers might tame this housing bubble. Tax policy offers a number of options for intervention. For example, the federal government could raise the capital gains tax on homes that don’t qualify as a principal residence. Further, the federal government could raise the amount buyers could ‘borrow’ from their RRSPs to fund home purchases.
Date: April 7, 2017
1) Are you graduating this spring? Is purchasing a home on the horizon for you?
2) Which of the polices proposed in the Globe and Mail article do you feel would be the best for taming the housing bubble in Toronto?
3) What will be some of the impacts on taxpayers if the federal government enacts these measures?