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In June 2023, Prerna Mathews, vice president of Exchange-Traded Fund (ETF) Product Strategy at Mackenzie Investments (Mackenzie), was considering what ETFs to launch for the remainder of the year. As Mathews deliberated over the potential launch of a covered call ETF at Mackenzie, she had many things to consider. How would this product compare to existing investment solutions offered by Mackenzie? What should the underlying portfolio that the calls were written on be, and what percentage of the portfolio should be covered? What should be the expiration date and strike price on the written calls? Mathews knew that these critical product decisions would have significant consequences on how such an ETF would perform under various market conditions, as well as the costs Mackenzie would incur in managing the ETF.

This technical note provides an overview of accounting for contingent liabilities. It outlines the decision process management uses to determine the financial statement implications of such liabilities. It provides an example and walks through the appropriate accounting steps.

This technical note provides an overview of accounting for investments in equity securities. It discusses passive investments and fair value accounting, investments resulting in significant influence and the equity method of accounting, and investments resulting in control and consolidation accounting. It provides examples of each of the three possible accounting approaches and walks through the appropriate accounting for each.

This case examines factors contributing to the collapse of Silicon Valley Bank (SVB) in March 2023, an event as unpredicted as it was quick. SVB funded nearly half of all U.S. venture-backed startups and at the end of 2022 held $173 billion in deposits, largely comprising the venture capital those startups had raised. On February 28, 2023, Moody's warned SVB about a potential credit rating downgrade, reflecting concerns over "funding, liquidity, and profitability" which factored in substantial unrealized losses on SVB's debt securities. To strengthen its balance sheet, SVB sold $21 billion in securities on March 8, but the move shocked its customers, as it resulted in a realized loss of $2 billion. The ensuing bank run intensified as SVB proved unable to placate investor fears or raise capital to plug that hole, and SVB was placed in receivership on the morning of March 10. Finger-pointing began immediately. Some argued that misguided pressure from Moody's over the fair value of SVB's debt securities prompted the bank's death spiral. Others blamed SVB management and directors, its regulators, and the venture capitalists whom SVB otherwise benefited. What went wrong, and what lessons could be learned?

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.

GlassHouse Research identified accounting red flags at Catalent. Fiat Lux Partners countered most of GlassHouse's claims. Who was right? This update explores the aftermath of the short seller duel.

ENGINO Toys is a decision-oriented case which is set in Cyprus (EU) at the beginning of the Covid-19 pandemic. The main protagonist is Costas Sisamos, the owner and Managing Director of ENGINO, Cyprus-based producer of STEM-oriented construction toys. In April 2020, the owner was overwhelmed by the disruptive shock caused by the Covid-19 pandemic and was wondering how he should react to this business challenge, and whether the orders from international distributors were delayed simply due to the pandemic or was this a sign of a coming collapse of his business model. Using distributors was a well-established practice in the toys business, but for over a year now Costas Sisamos had worried if that was the right business model for the future. His thoughts leapt to the idea of a STEM subscription box which had been in the back of his mind for some time. With rapid changes happening in the toy industry, the owner felt that he needed to consider new directions and new strategies. Coincidentally, there came an opportunity to bid for a local research grant. The owner was looking to answer three questions: "Will the STEM Box be profitable, and will the subscription project breakeven in year 2, as ideally expected? How do the financial projections fit into the overall strategic assessment? Based on the analysis, shall ENGINO proceed with subscriptions or not?"

Spreadsheet supplement for Case NA0812

In August 2022, Anthony Tan, co-founder and CEO of Flirtual, a virtual reality-based dating platform was deciding whether to hire a new employee or work with a consultancy to complete a major rewrite of the platform’s code. Flirtual had experienced high user growth, resulting in performance issues among some of its users. Tan wanted to decide how to continue growing its users while addressing these challenges.

Pharmabrew manufactured and distributed generic medicines to third-party pharmaceutical companies. Anna Nielsen, the company's CFO, had long been listening to unit managers complaining about the budgeting process, as they found it time-consuming and believed it did not add value to the business. Anna decided to change the process and hoped the unit managers will complain less. Unfortunately, John Christensen, the head of sales, fell ill during the budgeting process, and Martin Andersen, his assistant, had to take over. A few weeks into the year, Pharmabrew was in trouble. Deliveries were late, raw materials needed for production were unavailable, and clients were angry. What led to this situation?

Pharmabrew manufactured and distributed generic medicines to third-party pharmaceutical companies. Anna Nielsen, the company's CFO, had long been listening to unit managers complaining about the budgeting process, as they found it time-consuming and believed it did not add value to the business. Anna decided to change the process and hoped the unit managers will complain less. Unfortunately, John Christensen, the head of sales, fell ill during the budgeting process, and Martin Andersen, his assistant, had to take over. A few weeks into the year, Pharmabrew was in trouble. Deliveries were late, raw materials needed for production were unavailable, and clients were angry. What led to this situation?

In August 2022, Anthony Tan, co-founder and CEO of Flirtual, a virtual reality-based dating platform was deciding whether to hire a new employee or work with a consultancy to complete a major rewrite of the platform's code. Flirtual had experienced high user growth, resulting in performance issues among some of its users. Tan wanted to decide how to continue growing its users while addressing these challenges.

This technical note graphically presents various working capital ratios (days inventory outstanding, days sales outstanding, days payables outstanding, cash conversion cycle, and operating cycle) over the 2016-2022 period by industry and for specific well-known companies. Students are given the opportunity to craft an intuitive "story" around the ratios they are presented.

This is the supplemental B-case for product W33370.

<p align="justify">On May 5, 2023, Vicky Poirier received a call from Daniel Chen, vice-president of finance at Freeze Inc. After receiving an internal tip, Chen was calling to ask her to investigate a potential case of collusion involving one of his colleagues. As president of Quantum Juricomptable Inc. (Quantum), Poirier had to discuss the issues and challenges of this potential mandate with her team before deciding whether to accept it. Quantum’s investigation team, including forensic accountants, planned and performed an investigation to verify whether these allegations were true and prepared a forensic accounting report for a special committee at Freeze. The consequences of this report would be significant for the organization. How should the Freeze react to the report’s findings? What were the issues and challenges underlying any decision to dismiss the wrongdoers? Should Freeze dismiss them?<br><br>This case extends into a supplementary B-case, which introduces a new decision point (see product W33372).

On May 5, 2023, Vicky Poirier received a call from Daniel Chen, vice-president of finance at Freeze Inc. After receiving an internal tip, Chen was calling to ask her to investigate a potential case of collusion involving one of his colleagues. As president of Quantum Juricomptable Inc. (Quantum), Poirier had to discuss the issues and challenges of this potential mandate with her team before deciding whether to accept it. Quantum's investigation team, including forensic accountants, planned and performed an investigation to verify whether these allegations were true and prepared a forensic accounting report for a special committee at Freeze. The consequences of this report would be significant for the organization. How should the Freeze react to the report's findings? What were the issues and challenges underlying any decision to dismiss the wrongdoers? Should Freeze dismiss them? This case extends into a supplementary B-case, which introduces a new decision point (see product W33372).

On May 5, 2023, Vicky Poirier received a call from Daniel Chen, vice-president of finance at Freeze Inc. After receiving an internal tip, Chen was calling to ask her to investigate a potential case of collusion involving one of his colleagues. As president of Quantum Juricomptable Inc. (Quantum), Poirier had to discuss the issues and challenges of this potential mandate with her team before deciding whether to accept it. Quantum's investigation team, including forensic accountants, planned and performed an investigation to verify whether these allegations were true and prepared a forensic accounting report for a special committee at Freeze. The consequences of this report would be significant for the organization. How should the Freeze react to the report's findings? What were the issues and challenges underlying any decision to dismiss the wrongdoers? Should Freeze dismiss them?

Spreadsheet supplement for case 124015.