Wiley Accounting Updates

Posted September 9th, 2019 by Brent White & filed under Contemporary Business Issues, Student life.

Description: You may have noticed this – 81,000 new jobs were created in in August in Canada. A high number of the jobs were in the service sector and were secured by young Canadians. The unemployment rate of 5.7% is close to its lowest level in 40 years.

Date: September 6, 2019

Source: globalnews.com

Link: https://globalnews.ca/news/5864444/canada-jobs-report-august-2019/

Discussion Points:

1) Would you or any of your class mates have benefitted from the August job surge?

2) Do you work part-time during the school year? How do you fit it into your schedule?

3) In Wiley’s Financial Accounting: Tools for Business Decision-Making you can read about accounting for Employment Benefit Expense (see pages 528-9). In a situation where employment is increasing, what would you generally expect would happen to this expense?

Posted April 22nd, 2019 by Brent White & filed under Auditing, Sustainable Development.

Description: You may not have heard of micro plastics. These tiny bits – less than a fifth of an inch long – float around in the air of our major cities, cast off from the ubiquitous plastic we see daily. In an effort to find out how far these particles might drift, researchers visited snow fields in the Pyrenees in France. The shocking finding: each square meter received 365 micro particles per day. Ouch.

Date: April 15, 2019

Source: wired.com

Link: https://www.wired.com/story/wind-microplastics/?CNDID=33552549&CNDID=33552549&bxid=MjM5NjgxMDY5NTc2S0&hasha=760be779956395955cfbba5c497d22a3&hashb=af69b9c980e3f500b8bc4bf515a4150e6f9abf39&mbid=nl_041519_daily_list3_p4&source=DAILY_NEWSLETTER&utm_brand=wired&utm_mailing=WIRED%20NL%20041519%20(1)&utm_medium=email&utm_source=nl

Discussion points:

1) What did you find was the most surprising statement in this article from Wired?

2) If you were advising a company that was trying to audit the impact of its plastic pollution as part of its sustainable development strategy, what might be some of the audit procedures you could suggest?

3) In the vignette at the start of chapter four of Wiley’s Financial Accounting: Tools for Business Decision-Making you can read a bit about accounting practices in a major Canadian university. If a university researcher received a grant to study something like plastic pollution, how would the university treat any grant funds received that had not yet been expended by the researcher?

Posted April 22nd, 2019 by Brent White & filed under Marketing & Strategy, Student life.

Description: About three years ago this space covered the social-media backlash against Loblaw when they tried to delist French’s ketchup. Canadians rallied to support French’s, a company that reopened a padlocked plant in Leamington, Ontario, after ketchup giant Heinz pulled out of town. Canadians seem to be liking what they are tasting from French’s, indicating that longer-term success can’t just come from a social media victory. Of course, even though Heinz appears to have lost market share to French’s, it is still well out in front for the overall lead in the category.

Date: April 20, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/business/french-s-heinz-ketchup-leamington-sales-1.5102789

Discussion points:

1) Which ketchup is in your fridge? Would you switch to French’s because of the “support Leamington” angle?

2) If you were advising French’s on strategy, how do you think you might respond to Heinz’s new television commercial campaign?

3) In Chapter 5, page 242, of Wiley’s Financial Accounting: Tools for Business Decision-Making you can see a bit more about the French’s success story. Read how this caused a problem for some stores running out of stock of French’s. How can a company deal with the sudden surge in demand caused by social media posts?

Posted April 22nd, 2019 by Brent White & filed under Financial Reporting and Analysis.

Description: This past Thursday, the S&P/TSX composite index hit a new high at 16,612.81 points. Some believe that recent hints that interest rates won’t be rising may have contributed to this new high point. Rising oil prices may also have helped fuel the optimism. Since its low point in December, the market has soared over 20%.

Date: April 18, 2019

Source: globalnews.ca

Link: https://globalnews.ca/news/5183332/toronto-stock-exchange-record-high-2/

Discussion points:

1) What do you think has had the most influence on the rising stock market these past few months?

2) Does your university have an investment club or a course where you can more actively engage in market-watching?

3) Read about the Price-Earnings Ratio on page 71 of Wiley’s Financial Accounting: Tools for Business Decision-Making. In the current market conditions, what do you see happening to Price-Earning Ratios? What other information might you need to give a better answer to this question?

Posted April 15th, 2019 by Brent White & filed under Sustainable Development.

Description: Your federal government has decided to hand out approximately $12 million of our tax dollars for more efficient fridges: the problem Canadians are having with that is that the cheque is going to Loblaw, Canada’s largest grocery chain. Oh, did I mention Loblaw made about $800 million last year? To be fair, Loblaw did win a competitive bid process to come up with the cash, and improving the refrigeration will give the same carbon reduction as taking 50,000 cars off of the road. But for the average Canadian who may have just repaired their own fridge because they couldn’t afford a new one, it may seem like a bit too much.

Date: April 9, 2019

Source: globalnews.ca

Link: https://globalnews.ca/news/5145773/catherine-mckenna-loblaw-new-fridges/

Discussion points:

1) Were you aware of this part of the federal government’s carbon reduction plan?

2) Do you think this type of financial incentive should be given to large corporations to encourage sustainable development?

3) In Appendix B of Wiley’s Financial Accounting: Tools for Business Decision-Making you can see specimen financial statements for Loblaw’s major competitor Sobeys. If Sobeys were to receive a similar amount of aid for their fridges, what parts of the financial statements would change?

Posted April 15th, 2019 by Brent White & filed under Accounting Careers, Contemporary Business Issues.

Description: A new report from the Organization for Economic Co-operation and Development (OECD) concludes the middle class is shrinking. Even worse for Canada, our middle class seems to be faring a bit worse than those in other nations studied. As noted by OECD’s chief of staff, Gabriela Ramos, “The middle class is at the core of a cohesive, thriving society. We need to address their concerns regarding living costs, fairness and uncertainty.”

Date: April 11, 2019

Source: thechronicleherald.ca

Link: https://www.thechronicleherald.ca/news/canada/for-millennials-in-canada-the-middle-class-dream-slips-a-little-further-away-oecd-300708/

Discussion points:

1)Were you aware of the declining middle class phenomenon noted in this story? As you look ahead to your graduation, does this story impact how you plan for the future?

2) What can our political and business leaders do to address the issue? Can the accounting profession play a role in accomplishing important changes here?

3) One of the things we read about in the article is the impact of education costs. In Wiley’s Financial Accounting: Tools for Business Decision-Making we see a reference to the University of Calgary Students’ Union. What type of action can our various student unions take to address these important education costs matters?

Posted April 15th, 2019 by Brent White & filed under Accounting Principles.

Description: You may find your voice doing funny things when you read this story: there’s a shortage of helium. This gas, that can change the pitch of your voice of course, is in short supply, and not for the first time. That bad news hits far more than those wanting inflated balloons. Helium gas, produced as part of the natural gas refining process, is used for many things, including semi-conductor manufacturing, scientific experiments, and for operating MRI machines.

Date: April 9, 2019

Source: cbc.ca

Link: https://www.cbc.ca/news/business/helium-smartphones-fibre-optic-cable-mri-internet-scuba-1.5084212

Discussion points:

1) Have you heard about the helium crisis? Have you ever experienced it personally in any way? For instance, have any of the science labs at your school had shortages?

2) Do you think this type of shortage should be dealt with by the price incentives of supply and demand? Or, because of the medical and research benefits, do you think the government should intervene in the market in some way?

3) On pages 317-318 of Wiley’s Financial Accounting: Tools for Business Decision-Making you can read about the Lower of Cost and Net Realizable Value rule. Would you expect companies holding inventory of helium to have any write-downs in the near future?

Posted April 8th, 2019 by Brent White & filed under Personal Tax.

Description: Approximately $15 million: that’s the amount of tax revenue that the Canada Revenue Agency (CRA) has generated so far following the 2015 release of the Panama Papers. So far, the CRA has looked at 525 of the 894 Canadians identified in the Panama Papers. In 2016 CRA took a hard stance towards these Canadians, stating that anyone identified in the Panama Papers would not be eligible for the voluntary disclosure program. Voluntary disclosure allows a taxpayer to approach CRA to negotiate a deal that can help avoid prosecution. While Canada has generated $15 million, Spain appears to be the big winner so far with $210 million, though Britain hopes to eventually cash in with over $300 million in tax.

Date: April 3, 2019

Source: cbc.ca

Link: h https://www.cbc.ca/news/politics/panama-papers-cra-tax-recovered-charges-1.5082058

Discussion points:

1) Have you ever heard of the Panama Papers prior to reading this story? What do you find interesting about it?

2) What do you think of the CRA decision to not allow voluntary disclosure for anyone identified in the Panama Papers?

3) Page 170 in Wiley’s Financial Accounting: Tools for Business Decision-Making tells us that the Canada Revenue Agency requires companies to file two types of returns. What are these two types and how frequently must they be filed? (Try guessing first; then turn to page 170 to check your score).

Posted April 8th, 2019 by Brent White & filed under Cost Accounting, Marketing & Strategy.

Description: It’s an old story for small town entrepreneurs. The new road takes your customers into the city for better prices, better selection and you’re facing a crisis. But Dave Callahan, owner of an independent station in St. George’s Newfoundland, is striking back. As the Fred Eaglesmith song puts it, “Then they built that overpass and they stay out on the highway.” Dave is hoping to prove the song wrong.

https://www.youtube.com/watch?v=96ugqNZt8g4

Date: April 6, 2019

Source: cbc.ca

Discussion points:

Link: https://www.cbc.ca/news/canada/newfoundland-labrador/dave-callahan-st-georges-1.5082657

1) What do you think of Dave’s new corporate strategy? Do you think it will work?

2) Can you think of some other strategies Dave or a similar small business owner can use to combat this type of situation?

3) Illustration 5-8 in Wiley’s Financial Accounting: Tools for Business Decision-Making explains the way to calculate a company’s gross profit margin. If Dave cuts his prices, what will happen to his gross profit margin?

Posted April 8th, 2019 by Brent White & filed under Accounting Careers, Financial Reporting and Analysis.

Description: It’s not Toronto, or Vancouver. I’m afraid to tell you that those two don’t even make the top ten list. No, according to the Canadian Federation of Independent Business (CFIB), Canada’s most entrepreneurial city is Whitehorse, closely followed by Winkler, Manitoba. There appears to be no one single factor that trumps all others in making a community more entrepreneurial. The CFIB looked at 13 factors in its survey.

Date: April 3, 2019

Source: financialpost.com

Link: https://business.financialpost.com/entrepreneur/heres-the-best-canadian-city-to-start-a-small-business-in-no-its-not-toronto-or-waterlooh

Discussion points:

1) Have you noticed if your hometown or university town is in the top ten? The bottom ten? Were you surprised?

2) Do you have any plans to be an entrepreneur after graduation? What do you see as some of the key factors to consider in locating your business?

3) Chapter 14 in Wiley’s Financial Accounting: Tools for Business Decision-Making shows a wide-variety of ratios that can be used to evaluate various aspects of a business’s performance. If you were an entrepreneur, what do you think would be three key ratios you would put on your “dashboard” to quickly gauge how your business was performing?