Life insurance and macadamia nuts

Posted by & filed under Advanced Accounting, Auditing.

Description: When you think of Manulife Financial Corp, you probably think of life insurance. But you may be surprised to learn that the company has diverse investments ranging from timber to  renewable energy to macadamia nuts. A broader range of investments helps the company compete in the wealth management business while offering growth potential.

Source: Globe and Mail.com

Date:  January 2, 2015

Link: http://www.theglobeandmail.com/report-on-business/international-business/manulife-branches-out-from-insurance-in-quest-for-stability-and-profitability/article22278840/

 

Discussion Points:

1) What surprised you about Manulife’s investment portfolio? Why?

2) One of the investments discussed in the article is a joint venture in Chile in the timber industry. What are some of the special accounting considerations for joint ventures?

3) If you were the auditor of Manulife, what are some of the challenges you might face in gaining an understanding of the client’s business?

How about that for a snub?

Posted by & filed under Taxation.

Description: One of the big book hits of the last year has been French economist’s Thomas Piketty’s Capital in the 21st Century. Pikkety’s 700 plus pager has generated debate with his call for a global tax on capital, a prescription he argues is necessary to assist low growth economies that see too much wealth in the hands of too few. Piketty underlined his belief in dramatic fashion recently by refusing to accept the prestigious membership in France’s Légion d’honneur. This refusal has given an unusually high profile to the issue of tax policy.

Source: Globe and Mail.com

Date:  January 1, 2015

Link: http://www.theglobeandmail.com/globe-debate/editorials/le-grand-snub-de-thomas-piketty/article22277270/

Discussion Points:

1) If you were in Thomas Piketty’s position, would you have accepted this award? Why or why not?

2) What is your opinion regarding the argument that low growth is a symptom of wealth concentration?

3) Given that tax policy is so important to businesses, citizens and economies, why do you think we give so little profile  to it in the media?

 

Six big predictions for 2015

Posted by & filed under Accounting Careers, Canadian Economy.

 

Description: Saturday, January 3, the Report on Business cover story highlighted “Six stories to watch in 2015.” These six included discussion on oil uncertainty, housing prices, and the expectations for Canada’s banks. As a business student, you might find it useful to save this article after you read it. Then, set yourself a reminder to have another look  in late 2015. You’ll be in a position to see how Canada’s national newspaper did with its forecast for 2015.

Source: Globe and Mail.com

Date:  January 2, 2015

Link: http://www.theglobeandmail.com/report-on-business/2015-six-stories-to-watch-in-the-year-ahead/article22279192/

Discussion Points:

1) What do you think regarding these six big stories for 2015? Would you have placed anything different on the list?

2) To what extent do you agree with the Globe and Mail’s assessments and predictions? Explain.

3) Which of these stories do you think will have the most impact on careers for accountants? Why?

Praise for diversity in Canada’s banks

Posted by & filed under Accounting Careers, Corporate Governance.

Description: Canada’s financial sector has been ranked third in a list of 19 countries for the proportion of female executives serving these institutions. The report by Oliver Wyman  credits “a web of support” in the industry for the fact that 23 percent of Canadian financial executives are female. Norway at 35 percent and Sweden at 29 percent are the only countries exceeding Canada’s performance. Russia stood at a surprising fourth place on the list with females filling 20 percent of executive positions.

Source: Globeadvisor.com

Date:  December 5, 2014

Link: https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20141205/RBCDWOMENFINANCIALS

Discussion Points:

1) What do you feel about the Canadian financial sector’s performance in this area?

2) What can those charged with governance do to increase the percentage of female executives in this sector?

3) Are you surprised by Russia’s performance in this area, beating the United States and some of the Nordic countries? To what do you attribute this?


 

Uber valuation soars

Posted by & filed under Canadian governments, Contemporary Business Issues, eCommerce.

Description:  Have you ever hitched a ride using Uber? The operations of this  ride sharing service are proving disruptive to traditional taxi operations in major cities in over 50 countries. Now, Uber has raised an additional $1.2 billion in capital to fuel foreign expansion. This latest round of investment values Uber at over $40 billion.

Date:  December 4, 2014

Link: http://www.theglobeandmail.com/report-on-business/international-business/us-business/ubers-latest-funding-round-values-ridesharing-company-at-40-billion/article21954852/

Discussion Points:

1) Uber now ranks at the top in valuation for closely held tech companies. Do you think this over $40 billion valuation is warranted?

2) What strategy would you employ if you were an executive in a traditional cab company now facing a challenge from Uber?

3) How should local governments respond to pressures from traditional cab companies to regulate Uber service providers?

 

Forestry falling fast

Posted by & filed under Accounting Careers, Canadian Economy, Managerial Accounting.

 

Description: Ten years ago, over 300,000 Canadians made their living in the forestry and related industries. Since then, Canada has lost close to 120,000 jobs in the sector. Currency issues, commodity price swings, and the rise of the internet are all contributing factors to this decline. Meanwhile though, Canadian that depend on forestry jobs watch on as closing mills change their lives and the face of their  communities.

Source: Globe and Mail.com

Date:  December 5, 2014

Link: http://www.theglobeandmail.com/report-on-business/economy/paper-trail-the-fall-of-forestry/article21967746/

Discussion Points:

1) What does the decline of forestry say about the future of the Canadian economy?

2) What strategies could industry and government employ to deal with the decline of forestry?

3) If you were an accountant inside the forestry industry, how would you calculate rates of return on planting new forests which might not be harvested for many years by an industry that may be significantly different from what it is today?

 

 

 

 

 

The bailout story

Posted by & filed under Accounting Careers, Accounting Principles, Canadian Government, Financial Reporting and Analysis.

Description: One intriguing chapter in the most current report by Canada’s Auditor General, Michael Ferguson, discussed the AG’s examination of the 2009 government bailouts of Chrysler and General Motors. Ferguson reported as much as $4 billion of the governments’ investment could be lost if the federal and Ontario governments trade in their shares too early. Mr. Ferguson also noted that although there were a number of positives in the way the program was constructed, the fact that Industry Canada did not insist on detailed reporting from the funding recipients means it is extremely difficult to determine what exactly was accomplished by the bailout.

Source: Globe and Mail.com

Date:  November 25, 2014

Link: http://www.theglobeandmail.com/report-on-business/auto-bailout-data-difficult-to-amass-federal-auditor-reports/article21766842/

Discussion Points:

1) The article notes that the governments  sold some of their GM and Chrysler shares to pay down public debt. Mr. Ferguson notes that selling the shares early may result in losses on the investments. What strategy would you recommend – selling shares to pay down government debt or holding on to the shares for a longer period in an attempt to achieve higher gains?

2) What is your opinion on the use of taxpayer funds to bail out GM and Chrysler?

3) The article tells us that the government did not ask for detailed reporting from the funding recipients. Place yourself in the role of a senior accountant in the government. What type of reporting might you have asked for from the two automakers?

Buy back at Samsung

Posted by & filed under Financial Accounting, Financial Reporting and Analysis, Marketing & Strategy.

Description: Technology giant Samsung cheered up its investors recently through a major share repurchase. With profits falling, Samsung dug into its treasure chest of cash to placate investors, giving it time to rethink strategy. Samsung appears to be following the trend of several US technology companies that have used their cash surpluses to buy back stock, thereby increasing earnings per share.

Source: CNBC.com

Date:  November 26, 2014

Link: http://www.cnbc.com/id/102221645

Discussion Points:

1) As a strategy, what do you think of share buyback as a use of a cash surplus?

2) How would a repurchase of shares impact the financial statements of a company like Samsung?

3) What are some of the strengths and  limitations of Earnings per Share as a performance measure?

Canada Post posts profits

Posted by & filed under Advanced Accounting, Canadian Government.

Description: A few months ago, Canada Post was crying poor, predicting it would lose over $270 million before taxes. In this climate of loss, Canada Post announced an end to home delivery of mail in an effort to cut costs. This past week, however, Canada Post announced it has income of over $80 million for the first three quarters of the fiscal year. In light of this positive news, Canada Post employees and the general public might well be asking whether home delivery needs to end.

Source: TheStarPheonix.com

Date:  November 27, 2014

Link: http://www.thestarphoenix.com/business/Canada+Post+track+2014+profit/10418326/story.html

Discussion Points:

1) What is your opinion on the decision to cut home mail delivery in the light of these financial results?

2) What happens when a budget is so far from the actual results? What sort of accountability mechanism would you recommend?

3) What role could accountants play in improving estimates in publicly disclosed budget figures for organizations such as Canada Post?

Jack Johnson’s Woes

Posted by & filed under Accounting Careers, Advanced Accounting.

Description: Hockey star Jack Johnson is reportedly bankrupt. Despite earning roughly $18 million over his career, it appears that bad advice – and perhaps some misadventures by his parents – have led to his financial downfall. Johnson claims to have secured a new team of advisers to assist him in sorting his way out of these problems.

Source: Sportsnet.ca

Date:  November 20, 2014

Link: http://www.sportsnet.ca/hockey/nhl/columbus-blue-jackets-jack-johnson-bankrupt-parents/

Discussion Points:

1) How could someone who had such personal wealth become bankrupt?

2) What role could accountants have in assisting high income earners like athletes in navigating their way financially?

3) What is the difference between insolvency and bankruptcy?