Wiley Accounting Updates

Posted March 30th, 2020 by Brent White & filed under Canadian Government, Student life.

Description: We could soon be dealing with two million unemployed Canadians in the face of the COVID-19 virus. Canada has not seen unemployment rates like this in over 70 years. The story tells us that the job losses are not distributed very evenly, with about 40% of those making $14 an hour or less facing unemployment. For those in higher income brackets, the loss rate could be as low as 1%.

Date: March 25, 2020

Source: thestar.com

Link: https://www.thestar.com/business/2020/03/25/two-million-canadians-could-soon-be-out-of-work-and-women-and-low-wage-workers-will-be-hit-the-hardest.html?source=newsletter&utm_content=a01&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_22887

Discussion points:

1) Have you or someone you know lost a job during this crisis? How are they coping?

2) Were you aware of the federal government’s announcement that support would be available to those who lose their jobs?

3) In Wiley’s Advanced Accounting by Fayerman, you will find chapter ten dealing with financial reporting in the public sector. Given these exceptional circumstances, what size of deficit do you think the federal government financial statements will show for the year ending 31 March 2021?

Posted March 30th, 2020 by Brent White & filed under Personal Tax.

Description: During this highly unusual situation with Canada dealing with COVID-19, the Canada Revenue Agency (CRA) is giving some valuable extension room to Canadians. For instance, the normal April 30 deadline for most Canadians has been extended to June 1. CRA has set up a webpage to help Canadians keep up to date with these changes. https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update.html

Date: March 27, 2020

Source: cpacanada.ca

Link: https://www.cpacanada.ca/en/members-area/profession-news/2020/march/cra-covid19-updates?sc_camp=31BE415BD65E488F9A9D4C5B6C17D08C

Discussion points:

1) Will you take advantage of the extension in the filing deadline?

2) Have you ever been to the CRA website before searching for information? Was it easy to navigate to the information you needed?

3) On page 419 of Wiley’s Understanding Financial Accounting you will find an inset box discussing the issue of late remittance of amounts that are supposed to be forwarded to the CRA. Check out the special CRA webpage referred to above to see if there are any special extensions for remitting payroll deductions during this COVID-19 crisis.

Posted March 30th, 2020 by Brent White & filed under Financial Reporting and Analysis, Marketing & Strategy.

Description: Canada’s Competition Bureau is warning against the proposed acquisition of Air Transat by Air Canada. The Bureau is concerned that the combination of the two carriers would make things worse for travelers by raising prices and reducing service. The two airlines have over 80 routes with overlap.

Date: March 27, 2020

Source: thestar.com

Link: https://www.thestar.com/business/2020/03/27/competition-watchdog-warns-against-air-canadas-proposed-deal-to-buy-transat.html?source=newsletter&utm_content=a09&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_22980

Discussion points:

1) Have you traveled with both of these airlines? Which did you prefer?

2) What may be some of the strategic reasons Air Canada is proposing this purchase?

3) On page 495 of Wiley’s Financial Accounting : Tools for Business Decision-Making, is a chart showing some financial information selected from the financial statements of Transat A. T. Inc., Air Transat’s owner. A bit earlier in the chapter you will find financial information excerpted from WestJet’s financial statments. How does Air Transat compare to Westjet in terms of property, plant and equipment? How about in terms of net income?

Posted March 23rd, 2020 by Brent White & filed under Canadian Economy, Canadian Government.

Description: During this last week approximately 500,000 Canadians filed a claim for Employment Insurance (EI). In the same week the previous year, only 27,000 filed. The corona virus has caused closures and layoffs throughout the land, prompting unemployed Canadians to see this form of assistance.

Date: March 20, 2020

Source: theglobeandmail.com

Link: https://www.theglobeandmail.com/business/article-ottawa-receives-500000-new-applications-for-employment-insurance-as/

Discussion points:

1) Do you know anyone who has lost a job in the last week?

2) If you were in charge of processing these EI applications, what strategies would you use to handle this incredible increase in volume?

3) Read page 416 of Wiley’s Understanding Financial Accounting . What rate do employees pay for Employment Insurance? How much must employers pay for every dollar paid by employees?

Posted March 23rd, 2020 by Brent White & filed under Ethics.

Description: Just as in the week before, it is a bit of a challenge to find a business story that wasn’t about the corona virus. This one may catch your attention though: France has fined Apple and two wholesalers over $1.2 billion for anti-competitive behaviour. Perhaps not too suprisingly, Apple disagrees with the decision and the company intends to appeal.

Date: March 16, 2020

Source: cnbc.com

Link: https://www.cnbc.com/2020/03/16/apple-fined-1point2-billion-by-french-competition-authorities.html

Discussion points:

1) In the midst of all the COVID-19 talk this past week, has any other business story caught your attention?

2) What do you see as the key ethical issues in this story?

3) On page 6 of Wiley’s Financial Accounting : Tools for Business Decision-Making is a brief section on “Ethics and Accounting.” Do you think any part of this story about Apple and the two wholesalers would raise ethical issues for accountants inside the organizations?

Posted March 23rd, 2020 by Brent White & filed under Student life.

Description: During this highly unusual situation with COVID-19, we have seen the sudden interruption of various professional sports seasons. This has left many part-time employees who worked in arenas and sports venues without work. In Calgary, the NHL Flames had originally taken the stance that the employees who weren’t working would not be paid. But the Flames had a sudden reversal of decision, and now they have announced there will be help for the part-timers.

Date: March 15, 2020

Source: thestar.com

Link: https://www.thestar.com/business/2020/03/15/fundraiser-for-saddledome-employees-who-will-lose-shifts-raises-over-39000.html?source=newsletter&utm_content=a06&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_22439

Discussion points:

1) Have you found it hard to adjust to a life without sports?

2) What do you think can be done to help employees who have become unemployed because of closures due to the COVID-19?

3) On page 431 of Wiley’s Managerial Accounting : Tools for Business Decision-Making, you will find a discussion of setting a Sales Budget for the NHL’s Vancouver Canucks. Try an activity to build a sales budget for a team having a full NHL schedule, and then try to determine how the suspension of the season will impact things.

Posted March 16th, 2020 by Brent White & filed under Student life.

Description: It was hard to find a business story this week that wasn’t about the corona virus. But, here’s one: officials are worried about a massive shortage of truck drivers to move goods across North America. According to a recent report, Canada is short 20,000 drivers. It seems like the self-driving vehicles won’t be bailing us out any time soon.

Date: March 11, 2020

Source: thestar.com

Link: https://www.thestar.com/business/2020/03/11/report-sounds-alarm-over-truck-driver-shortage-as-job-vacancies-rise.html?source=newsletter&utm_content=a10&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_22256

Discussion points:

1) Have you ever thought of a career in the trucking industry? What would be some of the advantages to this career?

2) What do you think has created this shortage of drivers?

3) On page 12 of Wiley’s Managerial Accounting : Tools for Business Decision-Making, you will find Illustration 1-4, showing questions faced by managers in service industries like trucking. What questions from this illustration do you think are most applicable for the trucking industry ?

Posted March 16th, 2020 by Brent White & filed under Accounting Principles, Canadian Economy.

Description: Perhaps no industry has been hit harder by the Corona virus than travel and tourism. Flight attendants at Westjet are anticipating layoffs of up to 50% in the face of COVID-19. Things are moving very quickly in this crisis, as earlier in the week the layoff numbers being tossed around were in the order of 12%

Date: March 13, 2020

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/calgary/westjet-flight-attendants-layoffs-covid-19-1.5497037

Discussion points:

1) Do you know anyone working in the airline industry? How are they impacted by the situation?

2) What would be some of the most significant expenses for an airline?

3) On page 463 of Wiley’s Financial Accounting : Tools for Business Decision-Making, is a vignette featuring WestJet airlines. What approach has WestJet taken in calculating depreciation of its aircraft?

Posted March 16th, 2020 by Brent White & filed under Advanced Accounting, Canadian Government.

Description: One unusual outcome of the current corona virus situation may have been the unusual co-operation at the Legislative Assembly of New Brunswick on Friday. While budget debates are often long and perhaps divisive, this year in NB the budget and an additional bill passed in 17 minutes, with no one voting against the budget. With NB’s government in a minority situation, there had been some earlier thought that the government might fall. But with so many preoccupied by the COVID-19 situation, the consensus seemed to be it was not time for a spring election.

Date: March 13, 2020

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/new-brunswick/green-leader-pc-budget-1.5496809

Discussion points:

1) Would you like to see more of this type of co-operation in our political system?

2) Why do you think the tradition is that if a government cannot pass its budget that the government must fall?

3) In Wiley’s Advanced Accounting by Fayerman you will find a chapter on accounting in the public sector using PSAB rules. Why is the budget so central to financial reporting of governments?

Posted March 9th, 2020 by Brent White & filed under Canadian Economy.

Description: Mortgage rates in Canada took a drop this week following the Bank of Canada’s 50 basis points cut to its rate. The site ratespy.com – https://www.ratespy.com/ – estimated that for each 1/2% cut in interest rates, Canadians would save $500 per year on each $100,000 borrowed. This is Canada’s lowest interest rate since the recession of 2008. The reason for this cut: you guessed it; the corona virus.

Date: March 5, 2020

Source: thestar.com

Link: https://www.thestar.com/business/real_estate/2020/03/05/borrowing-to-buy-a-house-mortgage-rates-to-fall-following-bank-of-canada-rate-cut.html?source=newsletter&utm_content=a01&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_22002

Discussion points:

1) Do you plan on buying a home after graduation? Does this cut in rates impact your timeline?

2) Why would the Bank of Canada be cutting its rate during a temporary crisis like this?

3) Read the “Accounting Matters” section on page 535 of Wiley’s Financial Accounting : Tools for Business Decision-Making. What has the Bank of Canada said is one of the top risks to Canada’s financial system?