Wiley Accounting Updates

Posted November 16th, 2015 by Brent White & filed under Advanced Accounting, Corporate Strategy.

Description: The Globe and Mail categorized it as a “megabrew”. The two largest brewers in the world have combined to form an organization that will account for approximately 1/3 of the beer produced worldwide. Anheuser-Busch announced that is purchasing SAB Miller PLC for about $143 billion. Some maneuvering may be necessary in both the US and China to keep the extremely large “megabrewer” from having too much control in the marketplace.

Source: Globeandmail.com

Date: November 11, 2015

Link: http://www.theglobeandmail.com/report-on-business/international-business/us-business/ab-inbev-launches-sab-bid-to-sell-millercoors-stake/article27205423/

Discussion Points:

1) What would be some of the key strategic issues you would have to deal with in a mega-merger like this?

2) What would be some of the key accounting issues in accounting for such a consolidation?

3) How can consumers be protected in markets where the megabrewer has effective market control? Is there a point at which a brewer’s percentage of the market share is too high?

Posted November 16th, 2015 by Brent White & filed under Advanced Accounting, Auditing, Canadian governments.

Description: The Province of New Brunswick certainly seems to have its share of fiscal challenges, after having run deficits for several years. Last week the Province began looking at another cost-cutting measure: reducing the number of independent legislative officers. Legislative officers include the Auditor General and the Ombudsman. New Brunswick has nine of these officers while most other jurisdictions have fewer than that. Policy expert Donald Savoie recommends reducing the number to four.

Source: cbc.ca

Date: November 11, 2015

Link: http://www.cbc.ca/news/canada/new-brunswick/new-brunswick-legislature-watchdogs-review-warned-1.3314016

Discussion Points:

1) What’s your opinion on this discussion? Would you recommend a reduction in the number of officers?

2) In 1918 the Province of NB eliminated its auditor general office and it did not reappear for 50 years (see https://journals.lib.unb.ca/index.php/JNBS/article/view/24246/28032 for a detailed account of this change). Do you thing the government should make any changes to the auditor general’s office as part of this current review?

3) How should Canadian governments disclose money spent on legislative functions in their financial statements?

Posted November 16th, 2015 by Brent White & filed under Accounting Careers, Student life.

Description: Housing prices in places like Vancouver and Toronto are causing Globe and Mail arts columnist Marsha Lederman to wonder what retirement might be like for Gen-Xers, like her, or the Millennials who are following. She remembers the big day when her mother celebrated receiving a notice from the bank saying the home mortgage had been paid off, but she wonders if her own mortgage will be paid by retirement time. No one seems to be talking of freedom 55 anymore. And 34 percent of Canadians are apparently hoping for a lottery win to solve their retirement funding crisis. Lederman’s advice – “think hard about the choices you make.”

Source: Globeandmail.com

Date: November 13, 2015

Link: http://www.theglobeandmail.com/globe-debate/a-cautionary-tale-learn-from-those-smart-stingy-boomers-and-think-before-you-spend/article27255113/

Discussion Points:

1) As a student, are you thinking ahead to your post-university life and the financial choices that lie ahead?

2) What opportunities does this personal finance situation offer for accountants?

3) What are the odds of winning the lottery? Does it surprise you that 34 percent of Canadians seem to be considering it as a solution?

Posted November 9th, 2015 by Brent White & filed under Accounting Principles, Student life.

Description: Not liking the look of the climbing balance in your student loan? Wondering how you are ever going to repay that thing after you graduate and start working? Well, how about using a travel rewards program such as Aeroplan to help pay down that debt? Two provinces have already started such a program and negotiations are under way to bring it to the federal level to address Canada Student Loans.

Source: Torontosun.com

Date: November 2, 2015

Link: http://www.torontosun.com/2015/11/02/repay-student-loans-with-your-travel-points-feds-looking-into-repayment-plan

Discussion Points:

1) Do you currently hold a student loan? If so, how concerned are you about its impact on your future post-graduation?

2) Does this option of paying down your loan with travel points seem like something you might use? Why or why not?

3) If you were the company granting the rewards, how would you account for the liability for the points accumulated by students?

Posted November 9th, 2015 by Brent White & filed under Executive Compensation, Personal Tax.

Description: Valeant pharmaceuticals continues to be in the business press, with word this week that Goldman Sachs sold a huge chunk of CEO Michael Pearson’s shares in order to collect on a $100 million loan it had made Mr. Pearson. Apparently Mr. Pearson did not want his shares to be sold, though they had been pledged as collateral on a loan Goldman had made to him to cover charitable donations, pay taxes and purchase Valeant shares. Concern over Valeant’s dropping share price may have prompted Goldman’s action.

Source: Globeandmail.com

Date: November 6, 2015

Link: http://www.theglobeandmail.com/report-on-business/valeant-says-goldman-sold-13-million-shares-backing-loan-to-ceo/article27141542/

Discussion Points:

1) Do you think it was right for Goldman to sell the shares without Mr. Pearson’s permission?

2) What might be some of the tax consequences of this arrangement?

3) How might the practice of pledging shares as collateral affect executive behaviour?

Posted November 9th, 2015 by Brent White & filed under Accounting Principles, Auditing.

Description: Grabbing much attention in the Ontario media in recent days has been the ongoing discussion about secret payments by the Ontario government to the province’s teachers’ unions. During negotiations, the government paid approximately $3.7 million to the unions to cover various administrative costs associated with the negotiations. This week a legislative committee in Ontario voted unanimously to request Auditor General Bonnie Lysyk to investigate whether these payments were good value-for-money.

Source: Globeandmail.com

Date: November 4, 2015

Link: http://www.theglobeandmail.com/news/national/ontario-auditor-general-to-investigate-payouts-to-teachers-unions/article27097883/

Discussion Points:

1) Why do you think that this issue has generated so much media discussion?

2) How would a government account for these payments in its financial statements?

3) What criteria might an auditor general use to assess whether or not these payments were good value for money?

Posted November 2nd, 2015 by Brent White & filed under Accounting Careers.

Description: It was the type of headline that reaches out and grabs your attention: “Last of a generation of Bay Street vetrans.” The obituary went on to discuss the life and career of a stock trader, John Aiken, who had a remarkable career of 70 years. When he retired at age 87, he told the Globe and Mail that “the laugh has gone out of the business.”

Source: Globeandmail.com

Date: October 29, 2015

Link: http://www.theglobeandmail.com/report-on-business/john-aiken-last-of-a-generation-of-bay-street-veterans/article27039971/

Discussion Points:

1) As you contemplate your own career after university, what lessons do you think you and your classmates might learn from a man like John Aiken?

2) Mr. Aiken spent part of his career with the Ontario Securities Commission. What type of attributes and training do you think would make one successful in this type of career?

3) The article is certainly an interesting read. What is one thing that really stood out for you?

Posted November 2nd, 2015 by Brent White & filed under Advanced Accounting, Canadian governments.

Description: The government of Quebec has promised $1 billion in assistance to Bombardier Inc to help ensure the company’s new C series jet makes it to the marketplace. In exchange for its financial assistance, the government gets 49.5% of the C series jet and a right to buy 9% of Bombardier shares. Some commentators believe this aid will not be sufficient to get Bombardier through its crisis.

Source: Globeandmail.com

Date: October 31, 2015

Link: http://www.theglobeandmail.com/report-on-business/bombardier-and-its-state-aid-from-quebec-how-did-it-come-to-this/article27052858/

Discussion Points:

1) What is your opinion regarding this large intervention by the government of Quebec?

2) The article outlines a number of challenges faced by Bombardier. What do you see as the company’s most significant challenge?

3) How will the Quebec government account for these investments on its financial statements?

Posted November 2nd, 2015 by Brent White & filed under Canadian Government, Managerial Accounting.

Description: During the election campaign Justin Trudeau promised to suspend the previous government’s initiative to end home delivery of mail. And, in anticipation of the new government taking office, Canada Post has interrupted its plans to make scheduled cuts to the home delivery service. While this move may be politically popular, a analysis of the cost figures indicates that Canada Post is going to have to seek up to $500 million in additional funds from elsewhere.

Source: Globeandmail.com

Date: October 27, 2015

Link: http://www.theglobeandmail.com/report-on-business/rob-commentary/trudeau-about-to-face-his-own-mail-delivery-problem/article27001966/

Discussion Points:

1) What is your opinion on the cancellation of door-to-door mail delivery?

2) According to the article, the volume of paper mail has been dropping rapidly. What can an organization like Canada Post do to ensure its survival in the face of these pressures?

3) The article contains a chart showing the costs of various mail delivery methods. Canada Post data is the source of these costs. If you were asked to verify the costing information, what might be some of the information you would ask for?

Posted October 31st, 2015 by Brent White & filed under Canadian governments, Personal Tax.

Description: Canadians are anticipating some personal income tax changes following Justin Trudeau’s election victory on October 19. The Prime Minister designate campaigned on a platform of tax breaks for the middle class while stating his intention to raise the rates of the highest income earners. All this has prompted New Brunswick’s Finance Minister, Roger Melanson, to speculate that the province may have to cut its top marginal tax rate to avoide taxing the wealthiest at a combined rate exceeding 50%.

Source: CBC.ca

Date: October 22, 2015

Link: http://www.cbc.ca/news/canada/new-brunswick/melanson-tax-changes-1.3283334

Discussion Points:

1) Were you surprised by the recent Canadian federal election results?

2) What tax measures do you think should be implemented by the new government?

3) What is your opinion regarding setting tax rates? Is there a number – such as a 50% rate – that you think will negatively impact investment in a province?