Wiley Accounting Updates

Posted November 28th, 2016 by Brent White & filed under Public Finance.

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

Source: cbc.ca

Link: http://www.cbc.ca/news/canada/toronto/tory-road-tolls-1.3865246

Discussion Points:

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?

Posted November 21st, 2016 by Brent White & filed under eCommerce, Marketing & Strategy, MD&A.

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

Source: money.cnn.com

Link: http://money.cnn.com/2016/11/17/media/nytimes-subscription-rise/

Discussion Points:

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?

Posted November 21st, 2016 by Brent White & filed under Financial Accounting.

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

Source: theglobeandmail.com

Link: http://www.theglobeandmail.com/report-on-business/strong-investor-interest-spurs-bombardier-to-seek-14-billion-on-bond-market/article32878333/

Discussion Points:

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?

Posted November 21st, 2016 by Brent White & filed under Student life.

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

Source: theglobeandmail.com

Link: http://www.theglobeandmail.com/globe-investor/personal-finance/genymoney/why-you-need-to-teach-your-kids-how-money-works/article32901829/

Discussion Points:

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?

Posted November 14th, 2016 by Brent White & filed under Managerial Accounting, Marketing & Strategy.

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

Source: theglobeandmail.com

Link:

http://www.theglobeandmail.com/report-on-business/first-timbits-now-whoppers-burger-king-owner-eyes-revamp/article32735817/

Discussion Points:

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?

Posted November 14th, 2016 by Brent White & filed under Ethics.

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

Source: washingtonpost.com

Link:

https://www.washingtonpost.com/news/wonk/wp/2016/11/09/trumps-conflicts-of-interest-are-without-precedent-in-american-presidential-history/

Discussion Points:

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?

Posted November 14th, 2016 by Brent White & filed under eCommerce, Marketing & Strategy.

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

Source: theglobeandmail.com

Link:http://www.theglobeandmail.com/report-on-business/canadian-tires-profit-falls-on-lower-gasoline-prices/article32785546/

Discussion Points:

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?

Posted November 7th, 2016 by Brent White & filed under Advanced Accounting, Corporate Strategy.

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

Source: theglobeandmail.com

Link:

http://www.theglobeandmail.com/report-on-business/second-cup-establishes-special-committee-to-review-options/article32589379/

Discussion Points:

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?

Posted November 7th, 2016 by Brent White & filed under Accounting Principles.

Description: Despite increasing competition from newer low fare airlines such as NewLeaf Travel Co. Inc. and Canada Jetlines Ltd., Westjet Airlines reported third quarter earnings of $116 million this week. Westjet intends to continue its strategy of being a low cost provider in the face of this competition. The airline also noted it is looking to acquire more wide-body jets to support its new routes between Canada and Europe.

Date: November 1, 2016

Source: theglobeandmail.com

Link:

http://www.theglobeandmail.com/report-on-business/westjets-profit-jumps-14-per-cent/article32610227/

Discussion Points:

1) What did you learn about the airline industry from this article?

2) Chapter 9 of Wiley’s Financial Accounting: Tools for Business Decision Making discusses Westjet’s strategy for the airplanes in its fleet. What are the the two methods it uses?

3) What are some of the key costs that the airline industry has to control in order to be successful?

Posted November 7th, 2016 by Brent White & filed under eCommerce.

Description: Last week’s Wiley Weekly Accounting Updates featured a story on job churn: a concept voiced by the Finance Minister Bill Morneau to discuss the world of vanishing permanent jobs. And certainly one cause of job churn has been the so-called gig economy, where businesses like Uber maintain tall those drivers picking up passengers under the Uber app are independent contractors. A tribunal in London though isn’t buying Uber’s story. In ruling that Uber drivers are indeed employees, the tribunal said “The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous.”

Date: November 3, 2016

Source: theglobeandmail.com

Link:

http://www.theglobeandmail.com/report-on-business/rob-commentary/executive-insight/the-true-nature-of-the-internets-puppet-economy-is-being-exposed/article32670394/

Discussion Points:

1) Have you ever used Uber? Do you know any Uber drivers?

2) What is your opinion of this decision made by the tribunal?

3) What do you think about the author’s suggestion that the gig economy should be called the puppet economy?