Description: On Friday RBC announced that it would not be funding new oil drilling projects in the Arctic. Neither would the giant bank be financing new coal-fired projects. Andrew Block, speaking on behalf of RBC, said “We are committed to finding ways to balance the transition to a low-carbon economy.” It will be interesting to see how other Canadian banks respond to RBC’s initiative.
Date: October 2, 2020
1) What do you think about RBC’s move?
2) What sort of environmental efforts are students at your campus carrying out?
3) On page 1-26 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about an important section in a company annual report called Management Discussion and Analysis (MD&A). If you were preparing the MD&A for RBC’s next annual report, how would you present this decision on future investments?
Description: Last week this blog featured a story on the sale of Canada’s Mountain Equipment Co-op (MEC) to Kingswood Capital Management. This week comes news that MEC considered another alternative to solve its financial problems: a direct appeal to its close to six million members. But the decision-makers rejected the member bailout model as “impracticable to impossible.”
Date: September 25, 2020
1) If you were a MEC member would you have been willing to support a member-based bailout with some of your own cash? Why?
2) The article notes that a special committee of the board weighed the factors involved in the member bailout option and then decided against it. Do you think the committee made the correct decision? Why or why not?
3) Chapter 2 of Wiley’s Financial Accounting: Tools for Business Decision-Making, contains a section titled “Framework for the Preparation and Presentation of Financial Statements.” Illustration 2.21 summarizes this conceptual framework. What item in Illustration 2.21 seems particularly applicable for the MEC situation?
Description: The pandemic has changed a lot of things, and one of those is how Canadians are pursuing fitness goals. With gyms shut down, or operating under various restrictions, Canadians are stocking up on sports equipment for home and outdoors. The Peloton ‘smart bike’ is a popular – if pricey – choice for some, clocking in at $3,000. It also seems to be a great time to unload your surplus equipment on Kiiji or eBay.
Date: September 26, 2020
1) Have you been keeping up with your fitness activity during these strange days? What are you and your fellow students doing in this regard?
2) Do you know anyone who has sold used sporting goods during these past few months? What site or forum did they use to reach potential buyers?
3) On page 4-18 of Wiley’s Financial Accounting: Tools for Business Decision-Making, you can read about how Canadian Tire, one of the companies mentioned in the article, accounts for its sales of gift cards. Discuss with your classmates how you think these gift cards should be treated. Then go to page 4-18 to see if your theory is correct.
Description: Several weeks after a cyber-attack, the Canada Revenue Agency (CRA) reports that it is “working diligently to restore access to all services as quickly as possible.” Taxpayers have found some of the familiar online services are still not being offered. The CRA says that the fact that some of its employees have been working from home has not impacted this delayed recovery of service.
Date: September 24, 2020
1) Have you attempted to access your CRA account online recently? What problems did you encounter, if any?
2) Have you or any of your classmates encountered a data breach with any of your personal data on any of your online services or accounts?
3) On page 1-26 of Wiley’s Financial Accounting: Tools for Business Decision-Making, we learn about the elements of an annual report, including Management Discussion and Analysis (MD&A). Do you think that the MDA should be obligated to discuss security breaches that took place during the year? Why or why not?
Description: Lots of Canadians love their MEC – the Mountain Equipment Co-op. MEC’s stores and online outlets offer Canadians the opportunity for well-made and reasonably priced sport gear and clothing, as well making many Canadians shareholders of the co-op for a nominal fee. But the model no longer seems to be working well, and after some financial reverses, MEC is being sold to Kingswood Capital Management. MEC hopes to keep at least 17 of its stores open while offering employment to 75% of its staff.
Date: September 15, 2020
1) Have you been a MEC member and shopper? If so, how do you feel about these changes?
2) How might the COVID-19 crisis have impacted MEC’s sales?
3) Chapter 1 of Wiley’s Financial Accounting: Tools for Business Decision-Making, tells us about the four financial statements and the basics of what they are about. Examine the 2019 MEC financial statments with your classmates and determine what stands out for you. http://meccms.wpengine.com/wp-content/uploads/2017/06/2019-02-24-Mountain-Equipment-Co-Op-FS-AR_digital-signatures.pdf
Description: This seems like quite a surprise: a group of young and wealthy Canadians wants to pay more in taxes. There are approximately 200 of these Canadians in the so-called Resource Movement, and they are arguing for the government to tax them – and others in the 1% class – with higher rates or new measures, like an inheritance tax. Professor Patrick Leblond, who teaches in the Graduate School of Public and International Affairs at the University of Ottawa suggests another measure. He recommends that the full amount of capital gains be subject to taxation, rather than the current 50% exemption.
Date: September 16, 2020
1) What did you find interesting about the Resource Movement?
2) Why is it that only 50% of capital gains are currently taxed in Canada? Do you think the policy should be left as it is?
3) Chapter one of Wiley’s Auditing: A Practical Approach, talks about several types of audits or assurance engagements, such as financial audits, comprehensive audits, and internal audits. What type of audit would an auditor from the Canada Revenue Agency perform to determine the accuracy and completeness of a taxpayer’s capital gains?
Description: It’s the largest tech company Initial Public Offering (IPO) in the history of the TSX. Montreal payment processor Nuvei raised a whopping $700 million on Thursday on the TSX. A large portion of Nuvei’s customers are centered around the sports-betting industry, a growing part of the online world.
Date: September 17, 2020
1) Had you ever heard of Nuvei before you read this story?
2) What factors do you think drove the price of the shares so high?
3) Read the Accounting Matters inset box “IPOs Can be a Mixed Brew” on 11-6 of Wiley’s Financial Accounting: Tools for Business Decision-Making. After reading it, and thinking about this story of Nuvei, do you think you would have purchased shares in this IPO?
Description: Canadians want businesses to change direction, placing more emphasis on stakeholders and less on shareholders. A survey sponsored by the Canadian Centre for the Purpose of the Corporation (CCPC) shows Canadians want more focus on issues of income inequality, the environment, and discrimination. Canadians are interested in working for companies that pursue these important societal goals.
Date: September 11, 2020
1) Are you planning to look for employment with a socially-minded company when you graduate?
2) What do you think of this concept of balancing goals of profit and social factors?
3) The article discusses shareholders and stakeholders. Wiley’s Financial Accounting: Tools for Business Decision-Making, tells us about four financial statements in Chapter One. Which statement will tell us about how much shareholders have invested in a company?
Description: The corona virus pandemic has certainly been bad news for a lot of businesses. But the guitar industry has seen an impressive uptake in sales during this crisis. Fender says it is heading for a record sales year while Gibson is also enjoying a fine year.
Date: 10 September, 2020
1) Are you one of the many who has purchased a guitar during this pandemic? What about your classmates?
2) What do you think prompted this sales increase? How can the guitar manufacturers use it for longer-term growth?
3) In Chapter One of Wiley’s Financial Accounting: Tools for Business Decision-Making you will read about four financial statements. Which one would show users the increases in sales at Fender and Gibson?
Description: Much of the summer news featured the controversy of the federal government’s decision to award a sole-source contract for $43.5 million to the WE charitable group to deliver a student grant program. The backlash over the controversy has cost WE major sponsors such as Telus, RBC, and Virgin Atlantic. All this financial hit has prompted WE to announce that it will be winding down its operations and delivering the proceeds of asset sales to an endowment fund to support ongoing operations.
Date: September 9, 2020
1) Have you ever attended a WE Day event? If so, what are your memories of it?
2) What was your opinion of the controversy that arose over possible conflicts of interest in the granting of the contract to WE?
3) Page 1-4 of Wiley’s Financial Accounting: Tools for Business Decision-Making, talks about standards of ethical behaviour. What ethical standards may the government officials involved in granting the contract to WE have broken?