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On September 5, 2023, Luke Hayes, owner of Hayes Public Relations (HPR) in Toronto, Ontario, Canada, was reviewing the company’s financial performance for its seventh fiscal year. Having already reviewed the company’s operating decisions for the previous fiscal year, Hayes was now preparing to review the company’s financing and investing transactions for the fiscal year ending August 31, 2023.

On December 6, 2023, Shirley Rose, owner of the toy manufacturer Stacked, was reviewing the company's financial performance for its fourth fiscal year, ending November 30, 2023. Stacked manufactured toy wooden blocks in Stratford, Ontario, Canada. Rose needed to record all necessary accounting transactions for fiscal year (FY) 2023 using the FY 2022 statement of financial position, the FY 2023 list of cash receipts and disbursements, and other related information provided in the exercise.

On September 5, 2023, Luke Hayes, owner of Hayes Public Relations (HPR) in Toronto, Ontario, Canada, was reviewing the company's financial performance for its seventh fiscal year. Having already reviewed the company's operating decisions for the previous fiscal year, Hayes was now preparing to review the company's financing and investing transactions for the fiscal year ending August 31, 2023.

Mr. Highfly graduated with an accounting and finance degree in 2023, after which he was hired as an accountant by SG Development Limited (SDL). SDL was listed in the Singapore Exchange (SGX) and had established a reputation as a reliable provider of trading and shipping services in ASEAN countries. It planned to expand its operations to the real estate segment in Southeast Asia. In the first week after Mr. Highfly reported for duty, he was tasked to investigate the accounting treatments for investment properties and their implications on the company's financial statements.

This exercise presents common size financial information, from which students identify seven anonymized major US companies in the following business areas: railway services, meat product processor, telecommunications service provider, technology consulting provider, aerospace engineering, natural resources mining, and retail drug and convenience store. Students identify the companies using their skills in interpreting financial statement data.

By 2023, Silicon Valley Bank (SVB) in Santa Clara, California, had been successfully providing financial services to venture capitalists and private equity firms for 40 years. The bank, which catered to clients from the innovation and technology sectors, ran into problems and was taken over by the Federal Deposit Insurance Corporation (FDIC) on March 10, 2023, becoming the second largest US bank to fail after Washington Mutual collapsed in 2008. The US Federal Reserve System (FRS), while being criticized for having lax standards that contributed to the catastrophe, maintained that it had provided several warnings. The United States Senate Banking Committee planned to organize a formal congressional hearing to investigate the nature of SVB’s failures and flaws and to question the FRS and evaluate the regulator’s response to the same. Everyone involved was shocked by the collapse of a large bank like SVB. Was it an erroneous business model that concentrated on sector-specific clients that had led to SVB’s downfall? Or was the failure due to lax banking rules? Could a poor regulatory environment be held responsible? Another possibility was that SVB’s weak risk management oversights and controls could be blamed. What could SVB have done to avoid the disaster? What lessons could the banking sector learn to avoid such collapses in the future?

This exercise presents common size financial information, from which students identify seven anonymized major US companies in the following business areas: railway services, meat product processor, telecommunications service provider, technology consulting provider, aerospace engineering, natural resources mining, and retail drug and convenience store. Students identify the companies using their skills in interpreting financial statement data.

By 2023, Silicon Valley Bank (SVB) in Santa Clara, California, had been successfully providing financial services to venture capitalists and private equity firms for 40 years. The bank, which catered to clients from the innovation and technology sectors, ran into problems and was taken over by the Federal Deposit Insurance Corporation (FDIC) on March 10, 2023, becoming the second largest US bank to fail after Washington Mutual collapsed in 2008. The US Federal Reserve System (FRS), while being criticized for having lax standards that contributed to the catastrophe, maintained that it had provided several warnings. The United States Senate Banking Committee planned to organize a formal congressional hearing to investigate the nature of SVB's failures and flaws and to question the FRS and evaluate the regulator's response to the same. Everyone involved was shocked by the collapse of a large bank like SVB. Was it an erroneous business model that concentrated on sector-specific clients that had led to SVB's downfall? Or was the failure due to lax banking rules? Could a poor regulatory environment be held responsible? Another possibility was that SVB's weak risk management oversights and controls could be blamed. What could SVB have done to avoid the disaster? What lessons could the banking sector learn to avoid such collapses in the future?

Spreadsheet supplement for case W36678

In 2021, an investment management firm analyst needed to convince his portfolio manager that technology companies such as Amazon.com Inc. (Amazon) could have a strong investment thesis since they improved upon existing business models. To make his argument, he used financial ratio analysis to compare one of the portfolio manager's favourite companies, Walmart Inc. (Walmart), with a more technologically focused competitor in the retail space, Amazon. By analyzing the two companies using ratio analysis to highlight their similarities, the analyst sought to show his portfolio manager that Amazon was not only a technology company, but a better version of Walmart.

The accounts manager at the Commercial Bank of Canada, was reviewing a loan application from Pasquale's Pizzeria, located in Sarnia, Ontario. The business owner was ready to expand his family's business to London, Ontario, having requested a $300,000 long-term loan to finance the renovations and equipment to begin operations in London. They also requested a $20,000 line of credit to help fund the day-to-day operations of the business. The restaurant had never requested a loan of such magnitude, nor had the business undergone an expansion in its lifetime. With COVID-19 changing the food delivery landscape, the accounts manager was confident in his ability assess whether or not Pasquale's was ready to take on this expansion plan.

This technical note provides an overview of accounting for revenues. It discusses the five-step process to revenue recognition outlined in Accounting Standards Codification (ASC) 606 and applies those steps to both a simple example of the sale by a bakery and a more complex example of the sale by a software company of a bundle of services.

This technical note provides an overview of accounting for property, plant, and equipment and depreciation expense. It discusses determining what costs related to the asset should be capitalized and what should be expensed, determining what amount should be recorded on the income statement each period as depreciation expense (including alternative depreciation methods), determining if and when a change in the value of an asset should be recorded, and determining when to dispose of a fixed asset and how to reflect that in the financial statements.

Luke Thomas, owner and operator of Healthy Eats (HE), was considering the future direction of the business following an inflow of cash from a silent investor. HE was a meal prep delivery service located in London, Ontario that focused on fueling healthy lifestyles with locally sourced ingredients. Having proven the business model in London, Thomas was considering two distinct growth alternatives: opening a second kitchen in Hamilton, Ontario, or doubling down on securing new corporate clients. Regardless of his decision, Thomas also wanted to revisit HE's fiscal 2023 marketing strategy to ensure sales projections were met despite a limited budget.

Facilitated by hot Diablo winds, dry weather, and combustible vegetation, the Camp Fire in November 2018 almost destroyed the town of Paradise in Butte County, California. The fire also led to the demise of Merced Property and Casualty Company (Merced), a small property and casualty insurer based in Atwater, California. Following the Camp Fire, homeowners' insurance claims exceeded Merced's ability to pay out their insurance claims, and in December 2018, Merced was put into liquidation by the California Insurance Guarantee Association. In September 2021, Jessy Picado, chief executive officer of Insuredhouse, a small property and casualty insurer in Alberta, Canada, decided to scrutinize the case of Merced in a bid to restructure Insuredhouse's climate risk management plan. Picado appointed Dany Voisin, chief risk officer, to identify the reasons for the downfall of Merced and draw lessons from it. Voisin had to determine what available information and financial ratios would have been indicators of Merced's business vulnerability and use them in his analysis before making recommendations to Insuredhouse.

This technical note provides an overview of accounting for owners equity. It discusses the concepts of common stock and preferred stock, as well as authorized, issued, and outstanding shares. It covers the accounting for issuances of stock, repurchases of stock (treasury stock), capital stock and additional paid in capital, and dividends. It touches briefly on comprehensive income and earnings per share.

This technical note provides an overview of accounting for bonds. It discusses bonds priced at face value, a discount, and a premium. It discusses the differences between the coupon rate and effective interest rate and their implications for both the pricing and accounting for bonds. It covers the amortization of bond discounts and premiums, and it briefly discusses the early retirement of bonds and accounting for bonds using the fair value method.

This technical note provides an overview of accounting for inventory and cost of goods sold expense. It discusses accounting for the purchase and sale of inventory, periodic and perpetual inventory systems, inventory write-downs, and alternative inventory costing methods. It also discusses the use of the LIFO Reserve to adjust financial statements prepared using the LIFO method of inventory valuation to an as-if FIFO basis, illustrating those adjustments with an example.

This technical note provides an overview of accounting for accounts receivable. Students will learn how to account for sales on account, record write-offs and recoveries of accounts receivable, and estimate of bad debt expense using both the aging method and percent of sale method.