Posted by & filed under Financial Accounting, Student life.

Description: Big Tech giant Microsoft wants to grow bigger. Tuesday of last week Microsoft announced it is acquiring video game maker Activision in a cash deal totaling almost $69 billion. Activision’s products offer an advantage to Microsoft in the emerging virtual world. Some U.S. regulators are signalling, however, that they may take a hard look at yet another consolidation in the tech space.

Date:  January 18, 2022

Source:  cnbc.com

 Link: https://www.cnbc.com/2022/01/18/microsoft-to-buy-activision.html

Discussion points:

1) How many of your classmates are active in the gaming world? What are the most popular choices?

2) Why would a regulator be concerned about Microsoft acquiring Activision?

3) Illustration 12.4 of Wiley’s Financial Accounting: Tools for Business Decision Making provides a graphic illustrating the accounting guidelines for various strategic investments by companies. In which category does Microsoft’s investment in Activision fall?

Posted by & filed under Accounting Careers.

Description: When you find out a colleague who is bringing in less revenue to the company is making more money than you, that can sting. That’s exactly what happened to Jen Aitchison one night when she was out with some co-workers for a couple of drinks after work. Some, like HR professional Allison Venditti, argue for more openness on salary matters; it takes the secrecy advantage away from the employer, removing a way to suppress salaries. On the flip side, however, while some research suggests that transparency can help reduce pay gaps, it may also reduce average wages.

Date:  January 17, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/radio/costofliving/wage-transparency-not-everything-1.6311983

Discussion points:

1) Have you ever had a job where salary information was open?

2) When you are approaching graduation and looking for a career, will your choice of employer be influenced by salary transparency?

3) Page 1-13 of Wiley’s Auditing: A Practical Approach introduces the concept of corporate social responsibility (CSR) reporting. How might a company deal with salary transparency as part of its CSR?

Posted by & filed under Advanced Accounting, Corporate Strategy.

Description: Fashion chain Reitmans is exiting creditor protection after 20 months. The company, with HQ in Montreal, has paid its creditors roughly $95 million, about 1/2 of the amount owing based on public disclosures provided by the monitor Ernst & Young Inc. in September 2020. Between its Reitmans brand and its related stores, RW&CO and Penningtons, the clothier operates over 400 stores.

Date:  January 12, 2022

Source:  thestar.com

 Link: https://www.thestar.com/business/2022/01/12/reitmans-exits-court-protection-after-20-months-pays-95-million-to-creditors.html?source=newsletter&utm_content=a06&utm_source=ts_nl&utm_medium=email&utm_email=760BE779956395955CFBBA5C497D22A3&utm_campaign=sbj_99220

Discussion points:

1) Are you a shopper at Reitmans or any of its related parties?

2) Why would a company such as Reitmans seek protection under the Companies’ Creditors Arrangement Act as opposed to the Bankruptcy Act?

3) Chapter 12 of Wiley’s Financial Accounting: Tools for Business Decision Making discusses the reporting and analysis of investments, including investments in other companies. Check out the financial statements for Reitmans to determine how the investments in RW&CO and Penningtons are accounted for.

Posted by & filed under Accounting Careers, Personal Tax, Student life.

Description: Desperate times call for desperate measures. With unvaccinated citizens having a much higher probability of being hospitalized by contracting Covid-19 than vaccinated citizens, the Government of Quebec responded this week by announcing its intent to begin assessing penalties upon the unvaccinated. Premier Legault said $50 or $100 would not be enough. It remains to be seen if the move will survive anticipated court challenges.

Date:  January 12, 2022

Source:  ctv.ca

 Link: https://www.ctvnews.ca/health/coronavirus/quebec-s-tax-on-unvaccinated-trudeau-says-strong-measures-have-worked-1.5737100

Discussion points:

1) Does your university have a vaccine mandate? How is it enforced?

2) Are you in favour of the proposal by the Province of Quebec?

3) Starting on page 9-16 of Wiley’s Understanding Financial Accounting is a section dealing with employers’ responsibilities to remit income taxes deducted from employees to the government. Collecting this “No-vax Tax” may be quite a bit more difficult. If you were an accountant working for the Government of Quebec, what sort of program would you advise to identify and collect this levy?

Posted by & filed under Financial Reporting and Analysis, Marketing & Strategy.

Description: If you’re a Netfllix subscriber, get prepared to dig a bit deeper into your pocketbook. The monthly rate for the two-stream plans in Canada are heading to $16.49 from the current price of $14.99. Netflix asserts that the increase will help the company provide a “better experience” in a market that seems to be somewhat saturated with streaming sources.

Date:  January 14, 2022

Source:  cbc.ca

Link: https://www.cbc.ca/news/business/netflix-price-hike-1.6315677

1) How many of your classmates are Netflix subscribers? What other streaming services are you and your classmates subscribing to?

2) Have a discussion in your class about the plusses and the minuses of raising the fee. For example, will creating new offerings via the additional revenue draw new customers? Or, will Netflix lose customers who don’t like the rate increase?

3) Page 13-1 of Wiley’s Financial Accounting: Tools for Business Decision Making has a vignette discussing cash flows at Cineplex, noting that Netflix has placed a competitive challenge upon cinemas. In addition, Covid-19 has imposed an additional pressure on movie theatres. Search for the financial statements of Cineplex online, and, determine how cash flows have been impacted since 2020.

Posted by & filed under Ethics, Managerial Accounting, Student life.

Description: Early in the Covid crisis, many lauded grocery strore chains as they cranked up the salaries of front line employees with “Hero Pay.” But the “Hero Pay” premium has all but disappeared, while at the same time grocery chain profits have generated big bonuses for company executives. This has prompted pressure from various voices to bring back the premium given the expanded risk employees face under this latest wave of Covid-19.

Date:  January 7, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/grocers-hero-pay-unifor-1.6307698

Discussion points:

1) Have you ever worked as a front-line grocery worker during the pandemic? Did you benefit from “Hero Pay?”

2) Have a discussion in your class about how students could influence this debate. Do students and student associations have any tools they could employ to assist in the “Hero Pay” debate?

3) Appendix B of Wiley’s Financial Accounting: Tools for Business Decision Making provides a specimen financial statement for Sobeys, one of Canada’s major food retailers. As a reader of those financial statements, how might you be able to determine the financial impact of any “Hero Pay” premium?

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

Description: In the music business, 2021 was a good year for Adele; and for vinyl records. Though vinyl accounts for only 2% of U.S. music sales, for the first time since 1991, vinyl outsold CDs as the primary physical medium. Of course, streaming outstrips these older technologies by a huge order of magnitude.

Date:  January 6, 2022

Source:  cbc.ca

 Link: https://www.msn.com/en-us/music/news/music-2021-was-a-good-year-for-wallen-adele-%E2%80%94-and-vinyl/ar-AASvcEJ

Discussion points:

1) Do you or any of your classmates own a turntable?

2) What about vinyl appeals to music lovers in the digital age?

3) In Chapter 5 of Wiley’s Financial Accounting: Tools for Busine Decision-Making we are introduced to the multi-step income statement. How might the multi-step income statement of a vinyl music company differ from that of a streaming service?

Posted by & filed under Auditing.

Description: As the CBC story says, last Wednesday the former Provincial Comptroller, Paul Martin, was packing up his old office at Chancery Place in Fredericton, and getting ready to move down the street where he will now serve as the Province of New Brunswick’s Auditor General. The move is not without some controversy, as accountants, auditing professors, and auditing students might well imagine. One would expect the move would be a difficult one in maintaining the appearance of indpendence. But Mr. Martin maintains that he will “take a hands-off approach to files he dealt with as a senior Finance Department official, in order to avoid any perceptions of a conflict of interest.”

Date:  January 6, 2022

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/new-brunswick/new-auditor-general-perception-conflict-of-interest-1.6305151?cmp=rss&s=09

Discussion points:

1) Are you aware who the auditor is at your university? If not, track down your university’s financial statements online and see who has prepared the independent auditor’s report.

2) Have a discussion in your class about how students define the role of the auditor general in your province. Look up the relevant legislation to see how your responses compare to what the auditor general’s act says.

3) In Chapter 2 of Wiley’s Auditing: A Practical Approach we can read about the five threats to independence. Mr. Martin’s comments indicate he will be taking a hands-off approach on files he has previously dealt with while working inside government. Which of the five threats do you believe he is addressing with this response?

Posted by & filed under Accounting Careers, Student life.

Description: Last week this blog featured a story of how Starbucks employees in Buffalo unionized the first Starbuck’s location in America. Following quickly on that move came news this week of two locations undertaking similar certification efforts in Boston. Union organizers say they anticipate that Starbucks will respond with anti-union tactics, much as happened in the Buffalo location.

Date:  December 13, 2021

Source:  wgbh.org

 Link: https://www.wgbh.org/news/local-news/2021/12/13/starbucks-employees-at-two-boston-locations-move-to-unionize

Discussion points:

1) Have you ever been involved in a union work environment as a student employee?

2) Why do you think Starbucks would try to disrupt the efforts of union organizers? If you were a financial officer at Starbucks, what advice would you provide your employer with how to proceed in this situation?

3) Chapter 10 of Wiley’s Financial Accounting: Tools for Business Decision-Making deals with how employers account for various payroll deductions, including union dues. What are the basic journal entries to record the liabilities for amounts deducted for union dues?

Posted by & filed under Accounting Principles, Student life.

Description: It’s another blow from the Covid crisis hitting us as 2021 winds down This latest wave of the epidemic is causing problems for schools and universities. Exams are being postponed or moved online. Public schools are closing early for the Christmas break. Amid the turmoil comes this news of the need for better ventilation in our educational facilities to fight airborne transmission of the SARS-CoV-2. Universities are delaying the start of in-person classes for the January 2022 session.  https://www.cbc.ca/news/canada/new-brunswick/online-learning-new-brunswick-1.6291376

Date:  December 18, 2021

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/new-brunswick/covid-19-new-brunswick-airborne-ventilation-1.6290679

Discussion points:

1) Has the SARS-CoV-2 virus impacted the end of term on your campus or the beginning of the next term?

2) How would you describe the quality of the ventilation at your university?

3) The article notes that 60 of the public schools in New Brunswick do not have integrated mechanical ventilation systems, but there is a plan being developed to deal with the situation. Chapter nine of Wiley’s Financial Accounting: Tools for Business Decision-Making deals with long-lived assets, including a section on distinguishing between operating and capital expenditures. What principles would the Government of New Brunswick use to determine whether or not the installation of new mechanical ventilation systems would be a capital expenditure?