Wiley Accounting Updates

Posted January 22nd, 2024 by Brent White & filed under Accounting Careers, Financial Reporting and Analysis.

Description: Prime Minister Justin Trudeau has said that the time is up and there will be no more extensions for those business who had borrowed money under the Canada Emergency Business Account (CEBA). During the Covid-19 lockdown days, the federal government offered eligible businesses and not-for-profit agencies up to $60,000 in loans to help ride out the decline in business traffic. These organizations took out $48 billion in loans, and after January 18 the loans will start to accumulate interest at a 5% annual rate. Businesses that pay back or refinance their loans by that date are eligible for up to $20,000 of loan forgiveness.

Date: January 17, 2024

Source: cbc.ca

Link: https://www.cbc.ca/news/business/ceba-loan-not-extended-1.7085696

Discussion points:

1) Do you know any small business owners who took advantage of the CEBA program?

2) If you were an accountant advising a small business owner, would you advise them to refinance the CEBA at a financial institution?

3) Section 8.3 of Wiley’s Financial Accounting: Tools for Business Decision Making discusses the concepts associated with notes receivable, including the various terms that are part of the promissory note. Do a little research with your classmates to see what type of standard documentation the Government of Canada required the borrowers of the CEBA to complete.

Posted January 22nd, 2024 by Brent White & filed under Accounting Careers, Fraud, Internal control.

Description: The Financial Transactions and Reports Analysis Centre of Canada – often referred to as Fintrac – is reporting that money from illegal activities is being laundered through online gambling. Fintrac uses “big data” searches of millions of transactions as part of its investigative toolkit. Fintrac’s report focuses on gambling online in Canada between 2016 and 2023. As had been abundantly clear for anyone who watches sports on television, Canada’s sports betting industry has exploded in recent years.

Date: January 18, 2024

Source: halifax.citynews.ca

Link: https://halifax.citynews.ca/2024/01/18/online-gambling-sites-being-used-by-money-launderers-financial-intelligence-agency/

Discussion points:

1) How many of your classmates have used online sports betting? How do your fellow students feel about the industry?

2) Have you ever considered a career with an agency like Fintrac following your graduation? What type of skill set do you think Fintrac would be looking for?

3) Page 7-3 of Wiley’s Financial Accounting: Tools for Business Decision Making lists the five primary components of good internal control systems. Which of these components do you believe would be the most crucial in helping to prevent or detect money laundering ?

Posted January 15th, 2024 by Brent White & filed under Accounting Principles, Sustainable Development.

Description: It’s that time of year again: time to have a look at the highlights of the annual Consumer Electronics Show (CES) in Las Vegas. One big breakthrough was a tent with a built-in solar panel, set for mounting on a truck bed, bringing you enough wattage to run a portable refrigerator for 45 hours in your outdoor adventure. Another hit was a zero-emission front-end loader. Less environmentally-friendly were all the plastic Frisbees given away by companies at their booths to advertise their brands to the attendees.

Date: January 11, 2024

Source: winnipegsun.com

Link: https://winnipegsun.com/auto-news/auto-shows/2024-ces-hits-misses-highlights

Discussion points:

1) Have you or any of your classmates ever attended the CES?

2) Can you think of a more environmentally-friendly freebie than another plastic freebie?

3) Page 9-29 and 9-30 of Wiley’s Financial Accounting: Tools for Business Decision Making tell us about the accounting rules for determining when expenditures can be capitalized as development costs, as opposed to charging them ass research expenses. What are these rules?

Posted January 15th, 2024 by Brent White & filed under Accounting Careers, Managerial Accounting, Student life.

Description: Google might be a cash generator, but that doesn’t stop the tech giant from cutting hundreds of staff loose in an effort to satisfy shareholders or some other objectives. Google framed the move as “responsibly investing in our company’s biggest priorities and the significant opportunities ahead.” The employee union used different language, characterizing the job losses as “another round of needless layoffs.”

Date: January 11, 2024

Source: ctvnews.ca

Link: https://www.ctvnews.ca/business/google-lays-off-hundreds-in-hardware-voice-assistant-teams-amid-cost-cutting-drive-1.6720973

Discussion points:

1) What percentage of your classmates are users of Google’s hardware?

2) Does news of job cuts by large employers like this one have any impact on your career choices as you move towards graduation?

3) In the article on Google from ctvnews.ca, we read that the layoffs will “target hardware, voice assistance and engineering teams.” According to a study referred to on page 2-4 of Wiley’s Managerial Accounting: Tools for Business Decision Making what percentage of product costs can be attributed to direct labour?

Posted January 15th, 2024 by Brent White & filed under Accounting Careers, Accounting Principles, Ethics.

Description: Are you a Canadian consumer who has ever felt tricked by a cereal box? Ken Bennett was looking for a high-protein cereal choice, so when he spotted Kellog’s Vector in the cereal aisle with its claims of 13 grams of protein, he dropped a box into his shopping cart. On closer examination at the breakfast table, however, Mr. Bennett learned less than 6 grams of protein come from Vector; the rest comes from the recommended serving of milk poured over his “meal replacement.” Apparently that wording “meal replacement” gives Vector the legal right to make its 13 gram claim. Bennett offered “I felt tricked. I felt duped.”

Date: January 9, 2024

Source: cbc.ca

Link: https://www.cbc.ca/news/business/cereal-packaging-confusion-1.7076730

Discussion points:

1) Have you or your classmates ever “felt duped” by a packaging issue like this one?

2) If you were an official with Kellog’s, and you were asked to respond to Mr. Bennett’s concerns, what would you say?

3) Page 14-1 of Wiley’s Financial Accounting: Tools for Business Decision Making provides a vignette about the Sobeys grocery chain. How does this page characterize the margins in the grocery business?

Posted January 8th, 2024 by Brent White & filed under Personal Tax.

Description: It didn’t take long for many Canadian CEOs to earn more in a few hours than regular Canadians take all year long to earn: it took a bit over eight hours for them to surpass the average Canadian’s annual salary of $60,606. The Canadian Centre for Policy Alternatives released a study showing the top 100 business executives in Canada earned an average of $14.9 million in 2022, up from $14.3 million in 2021. The report calls on the government to introduce tax changes to address the income inequality problem.

Date: January 2, 2024

Source: thestar.com

Link: https://www.thestar.com/business/canadian-ceos-gilded-age-top-100-executives-saw-their-pay-packages-skyrocket-in-2022/article_8bbec820-a4fb-11ee-be71-bf6a68a60cd1.html?source=newsletter&utm_email=760BE779956395955CFBBA5C497D22A3

Discussion points:

1) How much do you think a CEO should be paid in comparison to other workers in the company?

2) The article notes tax measures might be one way to reduce wealth inequality. What is your opinion on this matter?

3) Page 1-3 of Wiley’s Financial Accounting: Tools for Business Decision Making tells us about a number of Canadian accountants with successful business careers. Are any of these on the list of Canada’s highest paid executives?

Posted January 8th, 2024 by Brent White & filed under Accounting Careers, Financial Accounting.

Description: Air Canada ranked tenth – i.e. last – for on-time performance among ten North American airlines. Westjet came in at seventh place, while Delta finished first overall. Industry watcher John Lawford of the Public Interest Advocacy Centre suggested this poor result “would seem to be a good wake up call for Air Canada.”

Date: January 2, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/air-canada-performance-on-time-1.7072663

Discussion points:

1) Do you have any personal experience with Air Canada failing to meet their promised arrival time?

2) If you were in a financial career at Air Canada, what information could you provide to senior management that might help them address this apparent problem?

3) Page 9-38 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses Return on Assets and Asset Turnover for Cargojet and Air Canada for the years 2020 and 2021. What were Air Canada’s results on these ratios for 2022?

Posted January 8th, 2024 by Brent White & filed under Accounting Principles, Student life.

Description: “That should not be the consumer’s responsibility.” That’s how Keldon Bester, from Canadian Anti-Monopoly Project, responded to government advice for consumers to switch carriers for cheaper cellphone rates. The controversy comes in the face of rate hikes from Rogers Communications and word from some consumers that Bell is also raising rates. Bester had previously criticized Rogers’s acquisition of Shaw Communications. One obvious problem with searching for another carrier is that Canada has a rather thin selection of suppliers to choose from, and one less, we might say, with the Shaw acquisition.

Date: January 6, 2023

Source: cbc.ca

Link: https://www.cbc.ca/news/business/mobile-wireless-pricing-competition-1.7076073

Discussion points:

1) What kind of rates are you and your classmates paying? How do they stack up against the chart in the article showing the rates consumers are paying in some other countries?

2) If you were the industry minister in the Canadian government, what would you propose to lower the rates?

3) Page 4-4 of Wiley’s Understanding Financial Accounting discusses a challenge Rogers faces in application of accounting policies. What is the nature of this challenge?

Posted December 18th, 2023 by Brent White & filed under Accounting Careers, Marketing & Strategy, Student life.

Description: Two large shareholders of GIldan Activewear have come to the defence of the company’s former CEO and are seeking to have him reinstated. Glenn Chamandy was both a founder of Gildan and the CEO until earlier in December, when, he says, he was let go without cause. The two shareholders – Browning West LP and Turtle Creek Asset Management Inc – are concerned about the potential impact of the firing on the company’s future growth.

Date: December 14, 2023

Source: toronto.citynews.ca

Link: https://toronto.citynews.ca/2023/12/14/gildan-shareholders-seek-ceo-reinstatement-allege-grievous-error-by-board/

Discussion points:

1) Do you own any Gildan products?

2) If you had a client who was a minority shareholder unhappy with a major decision like this, what would you advise?

3) Page 2-39 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses Gildan’s liquidity and those of its competitors, Artiza and Canada Goose. Search for more current data to determine which company might be the most liquid.

Posted December 18th, 2023 by Brent White & filed under eCommerce, Student life.

Description: A few years ago, the emergence of e-readers was seen as one more disruptive technology; one that seemed poised to kill the book. Well, take another look folks as the analog book is back. Sales of print books have risen somewhere between 10 % and 14 % in English speaking markets over the last three years. Calgary bookstore owner Nicola McNaughton notes the importance of the analog book as a “trophy” on young customers’ bookshelves.

Date: December 17, 2023

Source: cbc.ca

Link: https://www.cbc.ca/radio/costofliving/print-books-thrive-despite-e-readers-1.7056731

Discussion points:

1) Are you and of your classmates reading books in analog these days?

2) Are you planning on giving any books as gifts at Christmas?

3) Page 5-4 of Wiley’s Financial Accounting: Tools for Business Decision-Making tell us about the length of the operating cycle of 3 Canadian companies. How long is the operating cycle of bookseller Indigo Books & Music?