Birkenstock Now Public

Posted by & filed under Financial Accounting, IPO.

Description: Those comfortable Birkenstock sandals have been a favourite of many consumers for years, often symbolizing a counter-culture outfit. The arch-supporting footwear has been made in Germany since 1774, but this past week Birkenstock stock was publicly traded on the New York Stock Exchange for the first time. The initial public offering (IPO) brought in close to $500 million in exchange for 10.8 million shares. With manufacturing centred in Germany using predominantly European materials, it will be interesting to see if Birkenstock can maintain its traditions, given the new pressure of having to meet earnings expectations of a publicly-traded stock.

Date:  October 12, 2023

Source:  abcnews.com

 Link: https://abcnews.go.com/GMA/Style/birkenstock-public-new-york-stock-exchange/story?id=103916524

Discussion points:

1) Have you ever worn Birkenstock sandals? What do you think of them?

2) Do you think now that Birkenstock is publicly traded that it may face pressures to move production from Germany in order to reduce its costs?

3) Page 11-7 of Wiley’s Financial Accounting: Tools for Business Decision-Making discusses Initial Public Offerings (IPOs). What was the largest IPO in history and how much did it bring in?

Financial Stress Rising

Posted by & filed under Accounting Careers, Student life.

Description: A survey from the National Payroll Institute finds financial stress is rising among Canadian workers. Thirty-seven percent of those surveyed reported financial stress, with over sixty percent of that group indicating they need to spend their full net pay just to keep even. Meanwhile, thirty percent of those undergoing stress are drawing down savings or taking on additional debt to try and get by from paycheque to paycheque.

Date:  October 3, 2023

Source:  cp24.com

 Link: https://www.cp24.com/news/financial-storm-facing-canadian-workers-is-an-emergency-as-more-face-financial-stress-survey-1.6586625

Discussion points:

1) Are you and your classmates feeling the pinch from rising prices?

2) Would you consider a career as a financial advisor who would help Canadians manage their personal finances?

3) Illustration 7.11 in Wiley’s Financial Accounting: Tools for Business Decision-Making shows us six principles of cash management. Which of these can a family use to help them reduce their financial stress?

A 47-Year Mortgage

Posted by & filed under Financial Reporting and Analysis, Student life.

Description: Negative amortization is pushing some Canadian homeowners to longer and longer mortgages. When rising interest rates eat up more and more of a fixed payment from a client, the life of the mortgage gets extended to allow more time to pay off the principal. Homeowner Michael Girard-Courty now finds that only $27 of his $ 1,156 monthly payment on his variable rate mortgage is going to the principal, driving up the term of the mortgage to 47 years versus the original 25. Mortgage broker Patrick Betu would like to see the government outlaw the prospect of negative amortization.

Date:  October 5, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/mortgage-negative-amortization-1.6986214

Discussion points:

1) Had you been aware that there was such a thing as negative amortization?

2) As you look forward to moving into the workforce after your time as a student, would you consider taking on a 47-year mortgage to get into your first home?

3) Page 10-17 of Wiley’s Financial Accounting: Tools for Business Decision-Making has an inset box at the bottom of the page titled “Personal Mortgages.” What was the average mortgage on a home in Canada at the end of 2021? Do a quick search to see if you can find what that amount might be right now.

The Underground Economy

Posted by & filed under Accounting Careers, Auditing, Fraud.

Description: Statistics Canada reported last week that it estimates Canada’s underground economy was approximately $70 billion in 2021. This unreported activity was up about five percent over 2020. The largest components of the underground economy are residential construction, at 35 percent, followed by real estate rentals at 12.7 percent and retail at 10.5 percent. Statistics Canada did not include the illegal drug trade in its estimates.

Date:  October 6, 2023

Source:  ctvnews.ca

 Link: https://www.ctvnews.ca/business/canada-s-underground-economy-surged-to-68-5-billion-in-2021-statcan-1.6592965

Discussion points:

1) Were you surprised by these figures on the underground economy?

2) Would you consider these “under the table” activities to be fraud? Why or why not?

3) Page 3-13 of Wiley’s Financial Accounting: Tools for Business Decision-Making describes how the Canada Revenue Agency (CRA) normally collects income tax instalments from businesses. If you were a decision-maker at the CRA, what might be some approaches you would recommend to bring some of the underground economy under control?

A Tiny Step

Posted by & filed under Financial Accounting, Student life.

Description: Vancouver-based holding company Tiny has stepped into the film space by acquiring 60% of the shares of Letterboxd. Letterboxd is a film rating service that also allows users to develop a diary of their film experiences. Letterboxd has over 10 million users, including a number of celebrities.

Date:  September 29, 2023

Source:  ctvnews.ca

 Link: https://vancouverisland.ctvnews.ca/b-c-tech-holding-company-tiny-buys-majority-stake-in-film-review-platform-letterboxd-1.6583633

Discussion points:

1) Have you or your classmates ever used Letterboxd?

2) How do you and your friends share your thoughts and recommendations about films?

3) Page 12-11 of Wiley’s Financial Accounting: Tools for Business Decision-Making contains an illustration on “Presumed Influence over Investee.” In which category is Tiny’s influence over Letterboxd?

Are You Learning AI?

Posted by & filed under Accounting Careers, Student life.

Description: Failing to learn to work with Artificial Inteliigence – or AI, as it is commonly called – may be a major career mistake. In an example that may surprise you, clinicians at Toronto’s St. Michael’s Hospital Toronto are already using AI to their advantage in areas like patient monitoring and staff scheduling. Statistics Canada sees AI transformation coming for up to 40 percent of people in the workforce in the next twenty years.

Date:  September 27, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/artificial-intelligence-jobs-careers-training-panle-the-national-1.6978515

Discussion points:

1) How would you explain AI to someone who asked you?

2) What do you plan on doing as a student to set yourself up for an AI future?

3) Page 4-46 of Wiley’s Financial Accounting: Tools for Business Decision-Making shows us the 9 steps of The Accounting Cycle. Which steps do you think might be most vulnerable to replacement by an algorithm?

Old Foes, Now Friends

Posted by & filed under Marketing & Strategy, Student life.

Description: Rivals Peleton and Lululemon are now friends of sorts. Following a long legal “copy cat” dispute, Lululemon will begin manufacturing Peleton’s branded clothing, while at the same time it will stop producing its Mirror exercise platform and related on-line fitness classes. Retail analyst Neil Saunders, offered that both companies eventually realized that “dabbling in areas outside of their core competencies was not yielding results.”

Date:  September 29, 2023

Source:  cbc.ca

 Link: https://www.ctvnews.ca/business/peloton-shares-rise-following-a-partnership-with-former-foe-lululemon-1.6582751

Discussion points:

1) How many of your classmates have used product from either Lululemon or Peleton?

2) Do you think this strategy of cooperation was a good decision for both companies?

3) Chapter Six of Wiley’s Financial Accounting: Tools for Business Decision-Making opens with a vignette about lululemon athletica that discusses the Covid-19 crisis’s impact on the business. How did the company do during Covid times?

Moneris Back Online

Posted by & filed under Financial Accounting.

Description: A service outage by online payment processor Moneris on Saturday caused all sorts of problems for retailers and their customers. Darren Leroux of Moneris said that the system outage was approximately 90 minutes, impacting both debit and credit payments. Moneris indicated that this outage did not appear to be related to any sort of cyber attack.

Date:  September 23, 2023

Source:  ctvnews.ca

 Link: https://www.ctvnews.ca/mobile/business/moneris-says-systems-back-online-after-users-across-canada-report-outages-affecting-debit-credit-payments-1.6574910?contactForm=true?contactForm=true

Discussion points:

1) Was anyone you know impacted by the Moneris outage?

2) If you a manager of a store experiencing an outage like this, what strategy would you employ to deal with this problem?

3) Page 7-14 of Wiley’s Financial Accounting: Tools for Business Decision-Making includes an Accounting Matters inset box “How Do Businesses Make Payments?” What is the most common way for consumers to make payments according to this box?

Biosteel’s Big Name Creditors

Posted by & filed under Accounting Principles, Marketing & Strategy.

Description: Failed sports drink company Biosteel has left some big-name creditors on the hook. The company owes over $400 million to creditors and its financial problems appear to be linked to its strategy of recruiting expensive professional athletes for its marketing efforts. Several NBA franchises are owed hundreds of thousands of dollars. TSN and Rogers Communications also have large receivables from Biosteel that may have to be written off.

Date:  September 20, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/business/biosteel-creditors-list-1.6972536

Discussion points:

1) Have you ever tried Biosteel’s Sports drink? What did you think of the product?

2) What do you think of Biosteel’s marketing strategy?

3) Pages 8.13 and 8.14 of Wiley’s Financial Accounting: Tools for Business Decision-Making discuss the process for writing off bad debts. What is the journal entry you would make to record a write-off?

Alberta Wants What?

Posted by & filed under Financial Accounting, Public Finance, Student life.

Description: Half of the money in the Canada Pension Plan (CPP); that’s what Alberta wants for what it says is its share of the CPP. Not so fast, say experts. Before Alberta can withdraw it’s share out of the plan – if it even can – other Canadian provinces may have something to say about who owns what. And the Supreme Court of Canada would likely have to weigh in before all this controversy is resolved.

Date:  September 23, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/news/canada/edmonton/what-needs-to-happen-to-create-an-alberta-pension-plan-1.6975746

Discussion points:

1) As a student, were you aware of this pension dispute?

2) If you were a politician from a province other than Alberta, how would you respond to this news?

3) Page 10-7 of Wiley’s Financial Accounting: Tools for Business Decision-Making includes sample journal entries for how a company accounts for both the employee and employer contributions to the Canada Pension Plan. What are the differences in the two journal entries?