Wiley Accounting Updates

Posted January 20th, 2020 by Brent White & filed under Accounting Principles.

Description: Running federal deficits in good times may hurt Canadians in the long run according to HEC Montreal’s Centre for Productivity and Prosperity. Our Canadian government ran deficits from 2015 through 2018, and this may have lead to economic growth. Now, with no recession in sight, the latest financial update from the government indicated that the current deficit would be in the range of $27 billion, $7 billion higher than that projected in the budget. As the authors of the study say regarding current economic conditions, “If these aren’t the conditions for achieving a balanced budget, what will it take?”

Date: January 15, 2020

Source: thestar.com

Link: xhttps://www.thestar.com/business/2020/01/15/recurring-federal-deficits-could-be-risky-for-future-generations-study-says.html?source=newsletter&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_19813&utm_content=a06

Discussion points:

1) What is your opinion of the government deficit situation?

2) Where would the annual deficit show up on the Government of Canada financial statements?

3) On pages 381-2 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we read about the principles of cash management. When our government is running a deficit, what do you think would be some of the challenges in managing cash flow?

Posted January 20th, 2020 by Brent White & filed under Managerial Accounting, Uncategorized.

Description: Statistics Canada tells us that in Toronto and other cities in southern Ontario, wages for men have either been flat – no increases – or on the way down for the 15 year period between 2000 and 2015. In contrast, wages for males elsewhere in Canada went up by 13% over the same period. According to economist Sheila Block “This quantifies what everyone felt was true.” The reduction in manufacturing jobs has been tough not just on the manufacturing workers themselves, but also on their surrounding communities.

Date: January 15, 2020

Source: thestar.com

Link: https://www.thestar.com/business/2020/01/15/men-living-in-toronto-havent-seen-their-wages-increase-since-2000-according-to-new-statcan-study.html?source=newsletter&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_19813&utm_content=a02

Discussion points:

1) Do you know anyone impacted by this situation with manufacturing jobs?

2) One of the people quoted in the story puts the blame on poor government negotiation on trade deals, noting that Canada has slipped a long way from its old fourth-place standing in auto production. What do you think the government could do to secure better trade terms?

3) In Chapter 2 of Wiley’s Managerial Accounting: Tools for Business Decision-Making, is a thorough discussion of cost behaviour. Which of the various costs discussed in this chapter would be impacted by a freeze or a cut in wages over that 15 year period?

Posted January 20th, 2020 by Brent White & filed under Marketing & Strategy, Sustainable Development.

Description: BlackRock, the largest manager of financial assets in the world, is making an about face on climate change. In a letter to CEOs, BlackRock signaled that the economy is “on the edge of a fundamental reshaping of finance” due to the threat of climate change. BlackRock is looking at dispensing with coal-related investments and says it will work with the companies it invests in to ensure better environmental disclosures.

Date: January 14, 2020

Source: cbc.ca

Link: https://www.cbc.ca/news/business/blackrock-investment-climate-change-1.5426465

Discussion points:

1) Have you ever heard of BlackRock? If so, what do you know about the firm?

2) How do you think BlackRock’s change in strategy will influence behaviours in the marketplace?

3) In Chapter 1 of Wiley’s Auditing: A Practical Approach, you can learn about several different types of auditing. Which types of auditing could be employed to assist in efforts to disclose a company’s risk around climate change?

Posted January 13th, 2020 by Brent White & filed under Accounting Principles.

Description: In last week’s blog, you may have read the piece describing research by the Canadian government, noting that AI may not be targeting as many jobs as feared. Don’t tell the workers at the Loblaws grocery chain warehouses: they may not believe you. Automation and consolidation of facilities will put about 800 workers on the sidelines by the end of 2021. Loblaws says it will work with the unions to help ease the painful transition.

Date: January 7, 2020

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/montreal/provigo-maxi-loblaws-distribution-centre-laval-1.5417932

Discussion points:

1) Have you ever worked for a grocery chain as a part-time or summer job?

2) What types of jobs do you feel are most vulnerable to automation?

3) In Chapter 5 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we learn about the multi-step income statement (see page 257 for example). Where would the cost reductions from automation show up on this financial statement?

Posted January 13th, 2020 by Brent White & filed under Data security.

Description: The hackers are keeping busy. Travelex, a company dealing in foreign exchange transactions, has been hit by a virus. Reports say the hackers are holding Travelex to a $3 million ransom under the threat of releasing personal data. In the interim, the company’s outlets at various airports will use manual processes to exchange currency.

Date: January 10, 2020

Source: cbc.ca

Link: https://www.cbc.ca/news/business/travelex-hacker-1.5422665

Discussion points:

1) Have you, or anyone you know, had to pay a ransom to repair a hack?

2) If you were an executive at Travelex, would you pay the ransom??

3) On page 430 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about Equifax. This is another organization that was hit with a major hack. How did Equifax respond to this threat?

Posted January 13th, 2020 by Brent White & filed under Accounting Careers, Personal Tax.

Description: The Canadian Federation of Independent Business (CFIB) doesn’t think the Canada Revenue Agency (CRA) is doing a very good job responding to inquiries from its members. The federation has given the CRA a “D” grade, observing the tax agency takes too long to respond, and, when it does, businesses often get incomplete information. The CRA introduced a new phone system in an apparent effort to reduce the problems, however, the CFIB says that the tax authority did worse on this year’s survey compared to the previous one in 2016.

Date: January 7, 2020

Source: financialpost.com

Link: https://business.financialpost.com/personal-finance/taxes/business-group-gives-cra-a-d-grade-in-scathing-report-citing-wait-times-wrong-information

Discussion points:

1) Have you ever experienced trouble trying to obtain information from the Canada Revenue Agency?

2) The CRA frequently recruits university students to join them for both summer jobs and full-time work. How does a story like this one impact recruiting efforts?

3) Starting on page 172 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we find a section explaining the differences between the cash basis of accounting and the accrual basis. Which basis do you think CRA wants you to use? Why?

Posted January 6th, 2020 by Brent White & filed under Accounting Careers.

Description: The robots may still be coming – coming for your job that is – they just aren’t coming as fast as expected, at least according to research carried out this past year by the federal government. Nonetheless, expectations are that 11% of jobs could be replaced by some form of artificial intelligence (AI) in the next 20 years. Rural areas are one region of concern for federal officials. The information is contained in a report prepared to advise incoming ministers following the recent election. The CBC obtained the details by filing a request under the Access to Information Act.

Date: January 1, 2020

Source: cbc.ca

Link: https://www.cbc.ca/news/business/canadian-workforce-ai-documents-1.5412341

Discussion points:

1) Are you concerned about the rise of AI and how it may affect your future after graduation?

2) Have you ever given any thought to this whole access to information thing? I mean, from an accountability point of view, our tax dollars paid for these important reports to be produced. But in order for us to see the information we have already paid for, the CBC had to go through the hassle of filing a right to information request before preparing this important story. What do you think of this from an accountability point of view? Should there be an easier way to get to see what we have funded?

3) On pages 8-9 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about organizations that set accounting standards. If AI takes on a larger role in the accounting world, what might be some of the issues standard setters will have to deal with?

Posted January 6th, 2020 by Brent White & filed under Personal Tax, Student life.

Description: Richard Ivey, a well-known Canadian philanthropist, has died. Students may recognize the Ivey name for the Ivey Business School at Western University. The Ivey Foundation has donated over $100 million to various causes since it was founded by Richard Ivey’s father – also named Richard Ivey – in 1947.

Date: December 31, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/london/richard-macaulay-ivey-dies-at-94-1.5411382

Discussion points:

1) Are you a student at the Ivey Business School at Western? If not, do you know anyone attending that well-known school?

2) What are some of the reasons that a family might set up a foundation to distribute gifts to organizations?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making, has a vignette at the start of one of its chapters about Western University. Find this vignette. What important accounting topic does it introduce?

Posted January 6th, 2020 by Brent White & filed under Personal Tax.

Description: Things are changing in personal taxation for Canadians in 2020 and these changes will show up in various deductions on your paycheque stub. Finance Minister Bill Morneau had told Canadians to expect significant tax cuts to help the middle class. But financial planner Janet Gray says she would not count on people noticing any change. For those in the middle class, tax reductions are less than $10 per bi-weekly paycheque. Add on slight changes in both EI and CPP, and many Canadians may not see a difference.

Date: December 31, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/politics/tax-changes-2020-1.5402975

Discussion points:

1) Are you working part-time as you attend classes?

2) Do you examine your pay stubs closely or do you just take a look at the net amount going to your bank account by e-transfer?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making, has a section dealing with payroll deductions in Chapter 10. What are the journal entries for paying employees and then remitting the payroll deductions to the government?

Posted December 16th, 2019 by Brent White & filed under Marketing & Strategy.

Description: Things are looking up at popular Canadian “athleisure” vendor Lululemon. The Vancouver based retailer recorded net income of over $125 million in the third quarter, up about $30 million from the same period last year. The company is expanding its repertoire of products, moving into the self-care line of shampoo and body lotions. In addition, Lululemon wants to expand the in-store experience, drawing customers to its sites by offering classes and food items.

Date: December 12, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/canada/british-columbia/lululemon-revenue-third-quarter-1.5393764

Discussion points:

1) Are you a fan of Lululemon? How many Lululemon products do you own?

2) What do you think of this move into new products and experiences as a strategic effort?

3) Wiley’s Financial Accounting: Tools for Business Decision-Making, has an interesting vignette at the start of one of its chapters about Lululemon. Find this item and see if you can see what strategic misstep Lululemon may have made a few years ago. Has the company bounced back?