Description: It takes a while to bring two giants together. The planned merger of agricultural companies Agrium and Potash Corp has been ongoing for over a year. The latest hurdle has been cleared by Agrium’s sale of an Idaho phosphate producer for $100 million dollars, a move which was designed to ease the approval of the merger by American regulators.
Date: November 7, 2017
1) Why do you think we are seeing this large merger in the agricultural industry?
2) What are some of the accounting considerations that will need to be examined in this merger?
3) What chapter of Wiley’s Financial Accounting: Tools for Business Decision Making would assist you in accounting for one firm acquiring another?
Description: Decorated in the famous blue, Tiffany’s on Fifth Avenue, New York City, has opened a cafe. Now you too can have your breakfast at Tiffany’s, a notion made famous by Audrey Hepburn’s classic 1961 film. Breakfast doesn’t come cheap at $29 a plate. Or you can sit down for afternoon tea at $49 a shot.
Date: November 10, 2017
1) If you were visiting New York, would you be willing to plunk down $29 for breakfast at Tiffany’s on a student budget?
2) Do you think that this cafe will attract a steady stream of business?
3) Would managing costs be different in a high end restaurant like this versus in much less expensive breakfast cafe?
Description: This past week a study revealed that only 5% of Canadian tech companies have been founded by females. A similar 5% have a female CEO with females representing only 13% of the executive team. Further, 53% of these tech companies had no female executives. About a month ago, the Canadian Security Administrators released a study showing that in the broader economy, 62 % of companies had female representation as part of the executive team, illustrating a disconnect between the tech industry and other Canadian firms.
Date: November 2, 2017
1) Why do you think this discrepancy exists between tech firms and other companies?
2) What advantages could tech companies garner by bringing more females into the executive suite?
3) What might be some strategies to address this discrepancy?
Description: New Brunswick forestry companies are being hit with a duty of almost 21% on softwood lumber exports to the United States following a decision by the U.S. Commerce Department. It appears some parts of the forestry industry are blaming New Brunswick’s Auditor General for their misfortune, noting that the U.S. government relied on Kim MacPherson’s 2015 report in making this decision. While forest companies are calling for more study to dispute the AG’s reports on New Brunswick’s market for Crown wood, private woodlot owners are saying the problem is that the government has not implemented the Auditor General’s recommendations.
Date: November 3, 2017
1) Why has New Brunswick been hit with these duties while the neighboring Maritime provinces have not?
2) Do you think that a study disputing the Auditor General’s findings would undermine confidence in the Office of the Auditor General?
3) On page 284 of Wiley’s Financial Accounting: Tools for Business Decision Making you can see problem P5-10A dealing with various financial statement numbers of a major forestry company, Canfor Limited. How would the financial statement numbers presented in that problem be impacted by a duty similar to the one imposed on New Brunswick’s forestry companies?
Description: Canada’s Competition Bureau has launched an investigation into alleged price-fixing in Canada’s bread industry. Experts appeared surprised by the news, given the recent deflationary trends in the bread and rolls category. But the investigation reportedly stretches back as far as 2001, so it will be interesting to see what emerges.
Date: November 1, 2017
1) Are you a regular purchaser of bread? Have you noticed any price trends in your own grocery shopping?
2) What would be the ethical considerations around price fixing?
3) Wiley’s Financial Accounting: Tools for Business Decision Making discusses the terms profit margin and gross margin. Why do you think margins are so slim in the grocery business?
Description: Household debt. Inflation. A recession. All these are among the things that could trouble the governor of the Bank of Canada, Stephen Poloz. But among the list of things that could keep him up at night, CTV news says Governor Poloz fears a cyber attack focused on the financial system as possibly number one. Such an attack could quickly undermine confidence in the financial system – a system which operates on confidence. There were at least 8 high profile cyber attacks on banks in 2016, with one bank in Bangladesh losing $81 million in an electronic theft.
Date: October 26, 2017
1) Have you ever been hacked? What happened?
2) How could a cyberattack undermine confidence in the banking system?
3) In Chapter 7 of Wiley’s Financial Accounting: Tools for Business Decision Making you can learn about various application controls. Which application controls could a bank employ to prevent or detect a cyberattack?
Description: Retail is a very competitive industry, with companies perpetually seeking cost advantages over competitors. Walmart has often been seen as the leader in this respect, long renowned for its integration with suppliers and just in time deliveries. This week Walmart announced it would introduce a self-scanner for consumers to use in 22 of its Canadian stores to help it face competitive forces. With customers supplying Walmart with this “free” checkout labour, its probably bad news for Walmart workers.
Date: October 24, 2017
1) In problem 9-11A, page 508 of Wiley’s Financial Accounting: Tools for Business Decision Making, you can find a comparison of Walmart and Target, along with an invitation to calculate a few key ratios. Which company appears to be the leader?
2) As a consumer, how do you feel about contributing your own labour to assist in the checkout process? What are the pluses and what are the minuses?
3) What are the implications for the replacement of jobs by new technologies?
Description: In 1984, Paul Newman turned over his Rolex watch to his daughter’s college boyfriend, James Cox, all because Cox told Newman he didn’t have a watch when Newman asked him the time. The watch had been a gift from Newman’s wife, Joanne Woodward, during the filming of a 1960s race car movie. This past week, the watch sold for a record $17.8 million at auction, proceeds going to benefit the Nell Newman Foundation.
Date: October 27, 2017
1) What determines the price customers are willing to pay for a one-of-a-kind auction item such as Paul Newman’s Rolex watch?
2) Wiley’s Financial Accounting: Tools for Business Decision Making discusses various costing models for inventory in Chapter 6. If you were a dealer in luxury goods, such as Rolex watches, what costing model would you be likely to adopt?
3) Notice from the article that the proceeds from the watch benefited a charitable foundation. Which of Wiley’s accounting textbooks – featured under the banner Canadian Accounting Products accompanying this article – would provide you with guidance on the accounting considerations for not-for-profit organizations?
Description: Loblaws has announced that roughly 500 administrative staff will be laid off in a cost-cutting move. Loblaws stated the cost cutting is to help cope with rising costs – perhaps such as an increase in the minimum wage. As well, the company cited increasing competitive forces as another reason they had to give this bad news to 500 of its workers.
Date: October 16, 2017
1) Wiley’s Financial Accounting: Tools for Business Decision Making discusses Loblaws in one of its feature stories. Can you find any subjects in this feature story that might show other areas where a managerial accountant could find cost savings for Loblaws?
2) Think for a moment about being a CFO in a large corporation. How would you break the news of layoffs to your staff?
3) What do you think may be some of the chief competitive forces Loblaws is referring to in the article?
Description: It has taken about eight years – including an attempt earlier this past summer – but New Brunswickers finally know that their provincially owned electrical utility paid roughly $1.7 million in severance to David Hay, the organization’s former CEO. In 2010 Hay abstained from a vote by the board of NB Power to sell the utility to Hydro Quebec, and he abruptly resigned with only a day’s notice. The provincial government had maintained for years that it could not reveal the size of the severance due to confidentiality.
Date: October 17, 2017
1) The article speaks of a court decision which required the NB government to reveal severance payments. What do you think of this decision? Are you in favour of it?
2) As a citizen, do you think all salaries and related payments to government employees should be available for all to see?
3) Where would a Crown corporation like NB Power account for a payment like this in its financial statements?