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Financial Statement of Dominos Pizza

   

Added on  2021-05-30

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Financial Statement of Dominos Pizza_1

ContentsIntroduction.................................................................................................................................................2Source of Data.............................................................................................................................................2Provisions and Contingencies......................................................................................................................2Contingent liabilities and Contingent Assets Acquired in a Business combination......................................3Leased Items................................................................................................................................................4Reclassification of a Lease Payment............................................................................................................5Non Current Lease Payments......................................................................................................................5Conclusion...................................................................................................................................................5IntroductionDominos Pizza Enterprise Ltd. operates in Australia as a franchisee of Domino’ s Pizza Enterprise Ltd., USA.[ CITATION Dom17 \l 1033 ] The financial Statement of the preceding year was obtained from the Annual Report of 2017, which is easily accessible from the website. In addition, the website also publishes presentations of some concise financial figures on the website. This report further analyses the financial data obtained from these sources, in order to understand the financial performance of the Company. The objective of this report is to critique the quality of financial data available for the Company in public domain, especially regarding the provisions and contingencies in its financial disclosures (in this case, annual report).Source of DataThe Dominos Corporate website publishes a consolidated Annual Report for several countries. It is difficult to locate these reports on the website as compared to the data published by other multinationalCompanies such as Microsoft Inc, Apple Inc.. and Volkswagen.The data published for Australia for this source is contained in the consolidated Annual Report of Dominos Pizza Enterprise Ltd. in various geographical regions. The Annual Report provided on the website is a half yearly annual report which provides consolidated financial statements for all the various subdivisions of the Parent Company of Dominos Pizza Enterprises Private Ltd.[ CITATION
Financial Statement of Dominos Pizza_2

Dom18 \l 1033 ] Financial information for Australia is recorded under the ANZ (Australia and New Zealand Division). Moreover, the accounting period that the report is based on does not coincide with the Australian financial year or accounting year which ends on 30th June, every year. Hence, the financial statements were perused using the audited Annual Report provided by the firm to the Australian Securities Exchange.[ CITATION Dom17 \l 1033 ] It is expected that the data used from this report (contains data only for Australian operations) is of high quality since it has been audited and provided bythe firm in line with legal provisions. However, the consolidated report of the parent Company has been used for reference in some cases, to get a better understanding.Provisions and ContingenciesProvisions to accounting are recognized when the firm has an obligation in the present that was accrued in the past. . There is a probability that the firm would be required to settle the present obligation at the reporting date. Hence, an estimate must be made to understand the dollar value of that obligation. It is important to understand that the amount is an estimate and there is just a probability that a settlement will happen.[ CITATION Dom17 \l 1033 ]The amount that is used as an estimate is calculate using various financial methods and must take into account all the risks and uncertainties surrounding the obligation. The present value of the cash flows is used where the provision is made using the cash flows for the settlement expected.If the provision is being made for a settlement that is expected to increase the amount of cash receivable, then it is assigned as an asset. Similarly, if it is to be expected as a payable, it is accounted foras a liability.Some of the provisions made in the financial statements for the firm are:Onerous contracts: Onerous contracts are contracts whose economic benefits were over estimated and as a result, the firm may have to fulfil the aggregate cost. Such contracts drag down profitability and are usually, accounted for under liabilities. Dominos Pizza has made provisions for onerous contracts in the current statements for the value of the present obligations that might arise as a result of onerous contracts.
Financial Statement of Dominos Pizza_3

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