Description: This week art markets saw a new record auction price for a Canadian painting. Lawren Harris’s 1926 work, Mountain Forms, attracted a winning bid of $11.2 million, far more than the anticipated $3 million to $5 million. The buyer remains anonymous.
Date: November 24, 2016
1) The article notes that the painting was once owned by Imperial Oil but that the company has been gradually divesting itself of its art collection. What do you think might be the reasons for this?
2) When a company owns works of art, should it depreciate them?
3) Are there any tax advantages to owning or disposing of works of art?
Description: Chandeliers in the washroom. A trendy coffee bar down the hall. These are some of the pleasant features in Nicola Morgan’s co-working space where desk rentals begin at $125 per month. It’s a growing and attractive option for professionals and others.
Date: November 24, 2016
1) This article raises an interesting way of procuring office space. If you were the owner of such a space, how would you determine the rates you would charge your clients or members?
2) In looking ahead to your career, have you ever thought about becoming a sole practitioner? Would a work environment like this offer you an option for securing a working space?
3) Wiley’s Financial Accounting: Tools for Business Decision Making tells us about accounting for long lived assets in chapter 9. If you were the owner of a shared workspace, what might be some of the assets you would categorize under your property, plant and equipment?
Description: In a bid to fight traffic congestion and to raise additional funds, Toronto mayor John Tory announced this past week that major arteries such as the Don Valley Parkway are now candidates for a $2 per vehicle toll. Toll revenues will be plugged into funding for infrastructure and public transit. One aim of the proposed tolls is to target commuters from outside the city, forcing them to pay a share of the highways they use on their commutes into Toronto.
Date: November 24, 2016
1) What do you think of this strategy for raising public money for infrastructure?
2) Do you believe tolls can impact traffic congestion?
3) Where would this toll revenue show up in the city’s financial statements?
Description: The New York Times – America’s paper of record – has seen a major jump in subscribers since Donald Trump’s election victory. In the week after Trump’s election, the Times added approximately 41,000 subscribers. This represents the largest subscriber increase since the newspaper’s paywall went into action in 2011.
Date: November 17, 2016
1) Were you surprised that an election victory could spark a rise in subscriptions?
2) If you were assisting management in preparing the MD&A this year, how would you discuss this post-election sales boost?
3) If we are all getting our news for free, will it be worth exactly what we paid for it?
Description: Bombardier Ltd is receiving a major infusion of money. In a bond issue that far exceeded expectations, interested purchasers snapped up $1.4 billion U.S. of Bombardier debt. The bond proceeds will be used to pay off two debt issues coming due in 2018, allowing Bombardier to have a bit of breathing room as it continues its efforts to restructure.
Date: November 16, 2016; updated November 17, 2016
1) What do you think of Bombardier’s strategy of paying off the debt due in 2018 with more expensive debt?
2) Chapter 5 of Wiley’s Understanding Financial Accounting, Canadian Edition, discusses Bombardier’s Statement of Cash Flows. What do you think might change on its Statement of Cash Flows as a result of this bond issue?
3) Where in Wiley’s Financial Accounting: Tools for Business Decision Making can you learn about accounting for bond retirements?
Description: Did you know November is Financial Literacy Month? Globe and Mail personal finance columnist Rob Carrick wrote about this recently in discussing the need for parents to get involved in teaching financial literacy to their children. Carrick pointed out an interesting finding of a recent survey by the Canadian Foundation for Economic Education: teens want to learn about finances at home from their parents more than from any other source.
Date: November 17, 2016; updated November 18, 2016
1) How did you learn about managing your personal finances? Who was your best teacher?
2) Did your university or college host an education session by Rob Carrick and Roma Luciw this fall (as discussed in the article)? What did you think about these sessions?
3) Wiley’s Financial Accounting: Tools for Business Decision Making frequently employs a feature called All About You, relating the subject of the chapter to students’ personal financial management. Which one of these All About You sections have you found to be the most useful or applicable?
Description: 3G Capital Management, the Brazilian firm that purchased Tim Hortons, is now turning its attention to Burger King. 3G has prided itself in seeking improvements in other operations such as Kraft Foods, Tim Hortons and Heinz. Now it is turning its attention to helping Burger King’s performance in Canada catch up with rivals McDonalds, A&W, Wendy’s and Dairy Queen.
Date: November 8, 2016; update November 9, 2016
1) Were you surprised to see where Burger King ranked among its competitors in Canada?
2) What might be some strategy moves 3G could make to grow Burger King’s presence in Canada?
3) The article mentioned 3G’s cost cutting focus. What might be some managerial accounting tools that a restaurant chain could use to better control costs?
Description: With worldwide business interests that could be impacted by his policy choices, Donald Trump’s presidency raises a broad range of potential conflicts of interest. Some suggest it’s an ethical minefield. And, perhaps surprisingly, there is no law preventing a sitting president from maintaining all of these outside business interests while sitting in the White House.
Date: November 9, 2016
1) What surprised you most about this article?
2) Do you think there should be a law dealing with how a president handles their own business interests while in office? If so, what would such a law say?
3) Wiley’s Auditing: A Practical Approach discusses how auditors use the five threats to independence to evaluate their own independence prior to each engagement. Which of these threats might be most applicable to the President-elect’s conflicts of interest?
Description: Canadian Tire is cutting its capital expenditures for 2017 as it shifts its strategic focus to online sales and away from bricks and mortar. Part of this strategy will see Canadian Tire placing increased reliance on private label brands like its Mastercraft tools. Meanwhile, investors seem to like Canadian Tire’s performance as earnings per share beat the estimates of the analysts.
Date: November 10, 2016
1) What do you think of Canadian Tire’s plans to emphasize e-commerce?
2) Chapter 8 of Wiley’s Financial Accounting: Tools for Business Decision Making discusses Canadian Tire’s management of its accounts receivable. What do you think might change about its receivables as it moves towards more e-commerce?
3) Where in Wiley’s Financial Accounting: Tools for Business Decision Making can you learn about earnings per share? What does this ratio indicate?
Description: Coffee chain Second Cup may be looking for a buyer. It is revising its strategic plan in which it had targeted opening up to 85 new stores by 2018. With sales down 1.2 per cent this year, Second Cup might have trouble meeting an upcoming debt payment. But there are a couple of potential buyers who may Second Cup it as an attractive option despite these weaknesses.
Date: October 31, 2016
1) What strategies might Second Cup look at in addition to seeking a buyer?
2) Wiley’s Financial Accounting: Tools for Business Decision Making discusses Tim Horton’s in the opening vignette of Chapter 11. How do the results of Tim Horton’s discussed in the vignette compare to those of Second Cup?
3) What would be some of the key accounting issues that a company acquiring Second Cup would have to deal with?