Posted by & filed under Sustainable Development, Taxation.

Description: This past week Canada’s premiers met with the Prime Minister to discuss climate change. But the group was unable to come to a firm conclusion on any one way forward; rather there appears to have been a general agreement to make carbon more expensive. In New Brunswick, Premier Brian Gallant says this may be accomplished through the gasoline tax.

Source: CBC.ca

Date: March 4, 2016

Link: http://www.cbc.ca/news/canada/new-brunswick/carbon-tax-gas-emissions-1.3476852

Discussion Points:

1) Do you think that increasing the gas tax is the best way to approach this carbon reduction problem?

2) What do you think of the approach suggested by the Green Party leader to funnel the tax back to the population  “by providing incentives to switch to heat pumps, insulate basements, and have businesses get new, high-efficiency equipment?”

3) How would the government’s financial statements account for a dedicated fund such as that proposed by Mr. Coon?

Posted by & filed under Accounting Careers, Accounting Principles.

Description: Monday’s can be hard enough. But for Valeant Pharmaceutical’s CEO Michael Pearson, last Monday was tougher than most. After being on sick leave for two months, Mr. Pearson returned to work and promptly had to deal with an announcement that Valeant was under investigation by the Securities and Exchange Commission (SEC). The week before, Valeant had announced it would be restating previous results by close to $60 million.

 

Source: BNN.ca

Date: February 29, 2016

Link: http://www.bnn.ca/News/2016/2/29/Valeant-delays-results-as-Pearson-returns-to-work.aspx

Discussion Points:

1) What do you think would be your first order of business if you were Mr. Pearson and just returning to work?

2) If you were the CFO of Valeant, what role might you be playing in this crisis?

3) Why do you think Valeant may be changing the timing of its recognition of revenue?

Posted by & filed under Accounting Careers, Accounting Principles.

Description: It is still at the concept stage mind you. But the Gotoo is an intriguing concept vehicle – kind of a small bus designed to replace regular cars and trucks inside metropolitan areas. The concept offers a reduction in traffic problems by being a shared vehicle. The designers envision a customized interior that adapts by presenting each user with their favourite interior colour.

Source: Globeandmail.com

Date: February 21, 2016

Link: http://www.theglobeandmail.com/globe-drive/culture/technology/small-customizable-subway-car-designed-to-replace-cars-in-cities/article28768928/

Discussion Points:

1) What do you think of the potential of the Gotoo? Can you seeing this project getting off of the ground?

2) If you were the CFO of a maker of subway cars or buses, what type of advice would you provide to a CEO and a board who were expressing interest in researching this concept?

3) What are the accounting rules around research and development? When could you capitalize these costs?

Posted by & filed under Corporate Strategy, Data security, Managerial Accounting.

Description: It’s a pretty big battle out there with Apple going head-to-head with the FBI over the issue of encryption. Apple CEO Tim Cook has announced that the giant corporation will not cooperate with the FBI in opening up access to the cellphone of a terrorist. Apple has concerns that opening up its encryption secrets will make its customers more susceptible to “brute force” attacks. As well, if Apple is forced to cooperate, will this drive customers to foreign companies outside the reach of US authorities?

Source: Globeandmail.com

Date: February 19, 2016

Link: http://www.theglobeandmail.com/opinion/apple-and-the-fbi-this-is-a-battle-for-silicon-valleys-survival/article28815160/

Discussion Points:

1) Are you an Apple iPhone user? Did the Apple encryption protection influence your decision to purchase an Apple product?

2) What is your opinion of this dispute? Do you side with Apple or the FBI?

3) According to the Globe and Mail article, the day the story broke, an Indian company announced a smart phone with a price of $5. What do you think this phone may have cost the Indian manufacturer to make?

Posted by & filed under Accounting Careers, Advanced Accounting, Canadian Economy, Uncategorized.

Description: Try this one on for size: you pay the bank for the privilege of holding your money. Sounds pretty strange doesn’t it? But with stagnant economic growth, central banks in several jurisdictions are crossing the boundary between low interest rates and negative rates – effectively charging  banks to place their funds with the central bank. Even in Canada, Bank of Canada Governor Stephen Poloz said that he cold see lowering the bank rate to negative 0.5% if the country was hit “with another major shock.”

Source: Globeandmail.com

Date: February 19, 2016; updated February 20, 2016

Link: http://www.theglobeandmail.com/report-on-business/economy/negative-rates-a-remedy-for-slow-growth-or-a-risky-experiment/article28821523/

Discussion Points:

1) From your reading of the article, what do you see as the key argument for negative interest rates?

2) What effect will negative interest rates have on some of our accounting calculations?

3) Imagine you are a practicing accountant now with a designation. Many of your clients see you as their key business adviser. What will you tell your clients who have questions over the impact of negative interest rates?

Posted by & filed under Managerial Accounting, Student life, Sustainable Development.

Description: Lots of us love IKEA. And now comes word that IKEA is looking at a program that will let you take back your old IKEA  furniture to the store to receive credit on new purchases. Your old stuff will be resold or recycled, adding a big environmental benefit to the program as well as a convenient way to dispose of items you no longer want.

Source: Globeandmail.com

Date: February 18, 2016

Link: http://www.theglobeandmail.com/report-on-business/tired-of-that-ikea-old-book-shelf-furniture-take-back-could-be-coming-canada/article28779595/

Discussion Points:

1) Do you have any IKEA furniture in your place at university? Would you be interested in using this return program?

2) From a marketing perspective, do you believe this new program will provide IKEA with a strategic advantage?

3) This program raises similar cost-accounting issues as the trade-in valuation questions for dealers of new and used cars: which profit centre gets to park the profits? What are some of the cost accounting issues IKEA might want to consider in setting up this program?

Posted by & filed under Auditing, Sustainable Development.

Description: Canada’s provincial and federal auditors general are joining forces to take on a nation-wide audit of climate change actions in 2017. Julie Gelfand, the federal commissioner of the environment and sustainable development, whose office is included inside the Office of the Auditor General of Canada, announced the joint audit on Thursday. It will be a unique effort involving audit offices of various sizes and with different approaches focused on measuring Canada’s progress regarding this important environmental topic.

Source: Globeandmail.com

Date: February 18, 2016

Link: http://www.theglobeandmail.com/news/national/federal-provincial-auditors-general-to-audit-greenhouse-gas-emissions/article28794666/

Discussion Points:

1) How would all these auditors come to an agreement on a common approach for such things as audit objectives and audit criteria?

2) As a citizen what type of things would you like to see reported from this planned audit?

3) According to the Globe and Mail article, Canada is way behind on meeting its green house gas reduction targets. Do you believe that this audit may help focus political will towards accomplishing these targets?

Posted by & filed under Canadian governments, Personal Tax.

Description: Last week this blog featured a discussion on the shadow flipping phenomenon in BC, examining some of the ethical issues around the over-heated housing market. In this week’s provincial budget, the BC government took a number of steps to ease the pain. One of the efforts is a tax-break on the Property Transfer Tax for Canadian citizens and permanent residents on new homes of $750,000 or less. On the other side, the tax will increase for homes over $2 million.  In a measure more specifically linked to the shadow flipping phenomenon, BC is planning to gather more information on foreign buyers by reviving an old regulation requiring buyers to declare citizenship. The Finance Minister will await the results of a study due in April before determining if further action is required on shadow flipping.

Source: Globeandmail.com

Date: February 16, 2016; last updated February 17, 2016

Link: http://www.theglobeandmail.com/news/british-columbia/bc-budget-2016/article28765064/

Discussion Points:

1) Do you think the tax measures for houses under $750,000 will assist first-time home buyers?

2) If you were an accountant advising the BC government, what might you propose as a measure to help home buyers?

3) If the study to be delivered to the  BC Finance Minister reveals significant tax avoidance by shadow flippers, what can the BC government do to address it?

Posted by & filed under Canadian Economy, Ethics.

Description: You may be familiar with the stories of sky-high prices on real estate in Vancouver. One of the forces behind the rise is a practice known as shadow-flipping. In a shadow-flip, an agent earns multiple commissions on the same property by arranging resales of the property before the closing date. As well, those in the middle of these shadow flips may be able to avoid land transfer taxes. Meanwhile, prices keep going up.

Source: Globeandmail.com

Date: February 12, 2016

Link: http://www.theglobeandmail.com/opinion/reporting-from-the-middle-class-vancouver-trenches-send-help-or-money/article28742027/

Discussion Points:

1) Have you ever heard of this practice of shadow flipping before?

2) Do you see this practice of shadow flipping as ethical?

3) What can the provincial and federal governments do to help make housing more affordable for those in over-heated markets?

Posted by & filed under Personal Tax, Tax Planning.

Description: When faced with a financial challenge or a big purchase, Canadians might look longingly towards the funds they have stored away in their RRSPs. But dipping into the RRSP probably should be a last resort. One exception might betaking advantage of the federal home buyers program to make a tax free withdrawal of up to $25,000 for a first home purchase.

Source: Globeandmail.com

Date: February 11, 2016

Link: http://www.theglobeandmail.com/globe-investor/retirement/retire-taxes-and-portfolios/the-perils-of-using-your-rrsp-like-an-abm/article28700447/

Discussion Points:

1) Would you consider withdrawing from your RRSP to make a home purchase?

2) What advice would you give to someone who was considering using the RRSP as an emergency fund?

3) What are the main  impacts of withdrawing from your RRSP?