In October 2018, Canada legalized recreational use of cannabis. One year later, in late 2019, after share prices had fallen significantly from their peak, investors were looking for favourable investment opportunities in the cannabis industry. HEXO Corp. and Aurora Cannabis Inc. were two cannabis companies that traded on the Toronto Stock Exchange and followed International Financial Reporting Standards. In such a young industry, many companies were .....more

Teaching note for product W25183.

An investor is reviewing his investment in Air Canada to decide whether or not to sell his shares in the company. Recent weakness in the airline industry and a three-day strike by service staff has caused the investor to reevaluate Air Canada's long-term prospects. In particular, the investor wants to consider the company's pension plans in his analysis. A proposal to move new hires to defined contribution from defined benefit pension plans .....more

A consultant with a human resources consulting firm must reassess a client's long-term incentive program, by reviewing the current plans and considering other forms of incentives. Students will focus on accounting for equity-based compensation payments, the importance of assumptions in the determination of employee stock-option expense and financial reporting and economic implications of different long-term equity-based incentive plans.

An investor in General Motors Company (GM) has received the company's annual report, and is concerned with the increasing number of negative headlines in major newspapers regarding the company's business strategy and financial reporting. He must analyse GM's business and financial position and decide whether or not to sell his shares in the company. This case can be used to: facilitate a discussion about the implications of pensions on .....more

Assessing the state of a company's pension plan by looking at its financial statements is misleading. Enter smoothing and exit the same. But will it make a difference? The current state of many company's defined benefit pension plans may be parlous, but you would never know it from the balance sheets. The reason is that current accounting standards allow for the extensive smoothing of gains or losses. Will the elimination of smoothing present .....more

An equity analyst at an investment dealer is preparing a research note on Omnicom, a large advertising conglomerate, that will go out to the firm's institutional and retail clients. Overall, she is optimistic about the company's business prospects but is concerned about one issue. Omnicom has issued a series of contingent convertible note that could be exchanged for common stock once share prices reach pre-determined levels. The company was .....more

The Balanced Scorecard’s (BSC) appeal is reflected in the widely reported estimate that more than 50 per cent of Fortune 1000 firms have used it in some form. In this article the authors report on their research—among the first of its kind—which examines the critical factors that increase the likelihood that a firm will adopt the BSC. The authors found that BSC adoption was significantly associated with strategy: firms that followed a Prospector or .....more

This note presents a commonly used worksheet to organize pension-related data reported and disclosed under CICA Handbook Section 3461. Accounting for defined benefit pension plans can be complex, in part because much of the information is recorded off-balance-sheet.

An investor is considering investing in Air Canada bonds after reading an article on the attractiveness of the bonds. Trading at US$0.80 on the dollar, the bonds are yielding approximately 14 per cent. The investor must conduct some financial analysis on her own to assess whether the company's financial position has improved or deteriorated since a bond rating downgrade eight months ago. She must also evaluate how off-balance sheet operating leases .....more