http://www.canada.com/Goldcorp+buys+Canplats+million/2228918/story.html
Summary
On November 6, 2009, Goldcorp announced that they will be purchasing the venture company, Canplats Resources Corp. in an all-stock deal, worth $238 million. Once Canplats Resources Corp is obtained, Goldcorp will gain control of Canplats’ Camino Rogo project. The Camino Rojo site includes a deposit, which may contain around 3, 445 00 gold ounces and 6, 708, 000 silver ounces. The acquisition of the Camino Rojo project has been said to fit very well with one of Goldcorp’s strategic goals of enhancing opportunities in and around their core assets. As part of the agreement, Goldcorp will issue around 4.3 million shares on January 2010.
Connection
"Goldcorp buys Canplats for $238 million," is an article about the business activities of the company Goldcorp. To be more specific, the article is about investing and financing activities, which is a major topic in Chapter 1 of the Financial Accounting Textbook. Investing activities are activities that company execute to accomplish their goals with funds they acquire. The investing activity talked about in the article is the purchase of Canplats Resource Corp by Goldcorp. By investing in Canplats Resource Corp, Goldcorp will be able to achieve their strategic goals of enhancing opportunities in and around their core assets. This investment will probably bring in income in the future for Goldcorp. Besides investing, the article talks about another business activity that Goldcorp executed. That business activity is financing. Financing is an activity in which funds are obtained to buy major assets. Goldcorp does financing in the way of issuing shares. By issuing more shares of their newly acquired company, Goldcorp will be able to obtain funds in order to buy major assets the company needs.
Reflection
I think that Goldcorp’s decision on buying Canplats was a smart one. Even though it cost a huge sum of $238 million, I think Goldcorp will eventually be able to earn it back because I don’t think a company like Goldcorp would invest in another company, that they did not have any confidence in. Another reason why I believe that it was a good investment is because of the fact that purchasing Canplats fits one of Goldcorp’s strategic goals very well. Although it cost a lot to obtain Canplats, I'm sure Goldcorp will eventually profit from this invesment. Besides being a good invesment, Goldcorp will be able to use Canplats to do financing activities, like issueing more shares in the future. In general, I think that the transaction that occurred was good for everyone because Goldcorp was able to obtain a company they believe would help them with their goals and shareholders of Canplats Resources Corp. got shares in a newly-incorporated company. The only downside I see in this transaction is the fact that the shareholder of Canplats Resource Corp. will now have to do reserach on the financial position of the newly-incorporated company.
Tuesday, November 17, 2009
Tuesday, October 13, 2009
FAC12: Chapter 2 Article
http://news.bbc.co.uk/2/hi/uk_news/wales/wales_politics/8305018.stm
Summary
The performance of International Business Wales (IBW) has recently been criticised and questioned over staff expenses. Earlier in the year, First Minister Rhodri Morgan had firmly denied claims they had made about staff expenses, which later were found to be true. Later two reports were published .The first was an audit of expenses, which has found that some staff expense policies were unclear. The second report was an evaluation of the performance of IBW. The report showed that IBW was underperforming for the last five or more years in US, Asia and parts of Europe. KPMG auditors were sent to investigate expenditure under the order of Dame Gillian Morgan, the assembly government’s permanent secretary. Over 7, 000 transactions were examined by the auditors and they have concluded that a majority of procurement card and other transactions had been conducted properly, but some policies were said to be unclear, particularly for overseas-based staff. A proportion of about 11% of the transactions examined were possibly a breach of policy and a small number were clearly a breach of policy, where appropriate actions would be taken. The 11% of the transaction said to be a possible breach in policy will be followed up and should be concluded by Christmas Eve. People believe that the Government has failed to ensure that taxpayer’s money is spent wisely and effectively and wonder should the IBW continue to exist in its current form.
Connection
The connection between the article, “Assembly Overseas Work Criticised,” and the Financial Accounting Textbook are transaction analysis. Transaction analysis is an important part of accounting and if transactions made by IBW were analyzed properly in the first place, they wouldn’t be in the situation they are now. When a proper transaction analysis was done, auditors from KPMG found out that IBW made many unnecessary transactions. If proper and throughout transaction analysis had been made when IBW did a business transaction, they wouldn’t have been able to use the taxpayers’ money to pay for non-staff expenses. Some of the staff-expenses currently under claim are £553.87 ($969.26 CAD) on school textbooks, £150 (262.50 CAD) on football kits, and £3, 394 ($5, 940.42CAD) on entertaining a client at a ruby international. It was also stated that IBW was underperforming in US, Asia and parts of Europe over the past five years. This underperformance could be connected to the unnecessary transactions made, due to the lenient transaction analysis policies at IBW. If a company has poor transaction analysis policies, then it would surely underperform.
Reflection
I strongly agree with the fact that the government had let down the taxpayers and should change the ways of IBW. IBW shouldn’t be wasting taxpayer’s money on stuff like school textbook and entertainment. I think major changes need to be done to IBW. Although IBW isn’t really a business, I really think they should follow GAAP anyway. One specific principle I think they should follow is the Business Entity Concept; the principle that states that accounting for a business or organization should be kept separate from the personal affairs of the owner, or from any other business. I think this concept is very important, because if this principle was law, then IBW wouldn’t have been able to waste the hard earned money of the tax payers. Having a possible 11% of 7, 000 (781transactoins) transactions that might breach policy is way too much. The greedy higher ups in IBW might not think it is a lot of money, but I don’t think any taxpayers wants to know that the money they are paying goes to school books for wealthy children or entertainment when some family’s are having trouble meeting ends meet. Not only do changes need to be made to the IBW, I believe stricter polices need to be made so this doesn’t happen again, even thought this will probably happen again even with stricter policies.
Summary
The performance of International Business Wales (IBW) has recently been criticised and questioned over staff expenses. Earlier in the year, First Minister Rhodri Morgan had firmly denied claims they had made about staff expenses, which later were found to be true. Later two reports were published .The first was an audit of expenses, which has found that some staff expense policies were unclear. The second report was an evaluation of the performance of IBW. The report showed that IBW was underperforming for the last five or more years in US, Asia and parts of Europe. KPMG auditors were sent to investigate expenditure under the order of Dame Gillian Morgan, the assembly government’s permanent secretary. Over 7, 000 transactions were examined by the auditors and they have concluded that a majority of procurement card and other transactions had been conducted properly, but some policies were said to be unclear, particularly for overseas-based staff. A proportion of about 11% of the transactions examined were possibly a breach of policy and a small number were clearly a breach of policy, where appropriate actions would be taken. The 11% of the transaction said to be a possible breach in policy will be followed up and should be concluded by Christmas Eve. People believe that the Government has failed to ensure that taxpayer’s money is spent wisely and effectively and wonder should the IBW continue to exist in its current form.
Connection
The connection between the article, “Assembly Overseas Work Criticised,” and the Financial Accounting Textbook are transaction analysis. Transaction analysis is an important part of accounting and if transactions made by IBW were analyzed properly in the first place, they wouldn’t be in the situation they are now. When a proper transaction analysis was done, auditors from KPMG found out that IBW made many unnecessary transactions. If proper and throughout transaction analysis had been made when IBW did a business transaction, they wouldn’t have been able to use the taxpayers’ money to pay for non-staff expenses. Some of the staff-expenses currently under claim are £553.87 ($969.26 CAD) on school textbooks, £150 (262.50 CAD) on football kits, and £3, 394 ($5, 940.42CAD) on entertaining a client at a ruby international. It was also stated that IBW was underperforming in US, Asia and parts of Europe over the past five years. This underperformance could be connected to the unnecessary transactions made, due to the lenient transaction analysis policies at IBW. If a company has poor transaction analysis policies, then it would surely underperform.
Reflection
I strongly agree with the fact that the government had let down the taxpayers and should change the ways of IBW. IBW shouldn’t be wasting taxpayer’s money on stuff like school textbook and entertainment. I think major changes need to be done to IBW. Although IBW isn’t really a business, I really think they should follow GAAP anyway. One specific principle I think they should follow is the Business Entity Concept; the principle that states that accounting for a business or organization should be kept separate from the personal affairs of the owner, or from any other business. I think this concept is very important, because if this principle was law, then IBW wouldn’t have been able to waste the hard earned money of the tax payers. Having a possible 11% of 7, 000 (781transactoins) transactions that might breach policy is way too much. The greedy higher ups in IBW might not think it is a lot of money, but I don’t think any taxpayers wants to know that the money they are paying goes to school books for wealthy children or entertainment when some family’s are having trouble meeting ends meet. Not only do changes need to be made to the IBW, I believe stricter polices need to be made so this doesn’t happen again, even thought this will probably happen again even with stricter policies.
Wednesday, September 16, 2009
FAC12: Chapter 1 Article
http://www.vancouversun.com/business/fp/Rogers+seeks+block+Shaw+from+expanding+east/1976789/story.html
Summary
“Rogers seeks to block Shaw from expanding east,” is an article written by Joe Schneider from The Vancouver Sun. The article is about Rogers Communication Inc. suing its rival Shaw communications Inc. to prevent them from expanding into eastern Canada with the purchase of Mountain Cablevision. Mountain Cablevision is a company located in Hamilton, Ontario. The company currently has around 41, 000 TV subscribers, 28, 000 Internet subscribers and 27, 000 telephone customers in the Hamilton area. The difference between Roger’s and Shaw’s offer for Mountain Cablevision was about $10 million or 3%. Rogers Communication Inc. claims that Shaw is breaking the company’s nine-year old agreement to divide Canada in half with Roger providing its services east of Manitoba and restricting Shaw to western Canada. On the other hand, Shaw claims that any deal restricting a company to a portion of the country is illegal and unenforceable because of the fact it unfairly restricts competition. Charles F. Scott, the lawyer representing Shaw has said, “It’s not a matter of undue competition. It’s a matter of eliminating competition.”
Connection
The connection between the article, “Rogers seeks to block Shaw from expanding east,” and Chapter 1 of the Financial Accounting textbook is business activities. The type of business that was mentioned in both the article and textbook is investing activities. An investment activity is an activity where a business invests funds to accomplish the company’s goals. These activities include the purchase or sale of property/plant/equipment and the purchase or sale of other companies. In the article, Rogers Communication Inc. plans to invest to invest its funds in the purchase of Mountain Cablevision.
Reflection
I think that Shaw is right in thinking they have the right to buy any company it chooses and not be restricted by a nine year old agreement unless they had signed a contract with severe consequences. I believe it is wise of Roger to block Shaw from purchasing Mountain Cablevision. If they are successful in getting the investment, they will gain more clients, a new company, and will have prevented Shaw from expanding into what they think is their territory. However if Shaw is successful in getting the investment, I don’t think there is anything that can stop them from expanding further east, except being short on funds.
Summary
“Rogers seeks to block Shaw from expanding east,” is an article written by Joe Schneider from The Vancouver Sun. The article is about Rogers Communication Inc. suing its rival Shaw communications Inc. to prevent them from expanding into eastern Canada with the purchase of Mountain Cablevision. Mountain Cablevision is a company located in Hamilton, Ontario. The company currently has around 41, 000 TV subscribers, 28, 000 Internet subscribers and 27, 000 telephone customers in the Hamilton area. The difference between Roger’s and Shaw’s offer for Mountain Cablevision was about $10 million or 3%. Rogers Communication Inc. claims that Shaw is breaking the company’s nine-year old agreement to divide Canada in half with Roger providing its services east of Manitoba and restricting Shaw to western Canada. On the other hand, Shaw claims that any deal restricting a company to a portion of the country is illegal and unenforceable because of the fact it unfairly restricts competition. Charles F. Scott, the lawyer representing Shaw has said, “It’s not a matter of undue competition. It’s a matter of eliminating competition.”
Connection
The connection between the article, “Rogers seeks to block Shaw from expanding east,” and Chapter 1 of the Financial Accounting textbook is business activities. The type of business that was mentioned in both the article and textbook is investing activities. An investment activity is an activity where a business invests funds to accomplish the company’s goals. These activities include the purchase or sale of property/plant/equipment and the purchase or sale of other companies. In the article, Rogers Communication Inc. plans to invest to invest its funds in the purchase of Mountain Cablevision.
Reflection
I think that Shaw is right in thinking they have the right to buy any company it chooses and not be restricted by a nine year old agreement unless they had signed a contract with severe consequences. I believe it is wise of Roger to block Shaw from purchasing Mountain Cablevision. If they are successful in getting the investment, they will gain more clients, a new company, and will have prevented Shaw from expanding into what they think is their territory. However if Shaw is successful in getting the investment, I don’t think there is anything that can stop them from expanding further east, except being short on funds.
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