Contemporary Issues in Accounting: A Case Study of Blackmore's Company

This report analyzes contemporary accounting issues faced by Blackmore's Company, an Australian listed health supplements business. The report examines issues like the decline in share price, the impact of China's new e-commerce law, declining sales, and dividend cuts. It explores the effects of these issues on accountants, investors, and the overall business. The analysis includes a review of the company's financial performance, challenges in the Chinese market, and the implications for stakeholders. The report also offers recommendations for the company's accountants, such as cost-cutting measures, improved financial management, and the adoption of new technologies. The conclusion summarizes the key issues and their impact on the company's financial health and future prospects.

Contemporary Issues in Accounting
Blackmore’s Company
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Contemporary Issues In Accounting 1
Executive summary
The report is prepared to analyse the contemporary issues in accounting as well as the impact on
different stakeholders. Blackmore’s company has been selected which is an Australian listed
company. The findings of the report include different accounting issues of Blackmore’s which
are supported with the share price of business that is declining from past two years. It has been
determined that it leads to an impact on accountants as they need to manage the funds from
different ways due to decline in cash. The findings show that this affects the investors and they
want to purchase the shares of the company and in return, they sell their shares.

Contemporary Issues In Accounting 2
Contents
Introduction......................................................................................................................................3
About the company..........................................................................................................................3
Contemporary issues of accounting.................................................................................................3
Share price fall.............................................................................................................................3
New e-commerce law by China...................................................................................................4
Decline in sales............................................................................................................................4
Dividend slashed..........................................................................................................................4
Recommendations............................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

Contemporary Issues In Accounting 3
Introduction
The aim of report is to permit students to study and examine the present social issues in
accounting and assess their influence on different investors. The company that has been selected
for this report is Blackmore’s limited which is an Australian health supplements business came
into existence in the year 1930 by naturopath Maurice Blackmore by opening first health food
shop in Australia in Brisbane, Queensland. Currently, the company is ASX 200 Company with
market capitalization of $2 billion. The identification of the contemporary issues in accounting
has been done with the help of analysis of share price for the last 2 years. Furthermore, there is
analysis of an impact on corporation share price during this time.
About the company
Blackmore’s is a well-known company that is concern about offering natural healthcare products
to their clients as it helps them to meet the needs of customers. Currently vitamins, minerals,
herbs and nutrition are considered as primary elements which are consumed by the customers
daily as this is part of their diet. The health and wellbeing concern among the customers is
improving due to which the industry has been extended in the countries like Australia, New
Zealand and Asia market. In addition to this, company is expanding business on a large scale
which is possible with support of channels of business (Blackmore’s, 2020). Blackmore’s is
currently managing operations in the market of Australia, New Zealand, China and another
region of Asia.
Contemporary issues of accounting
In the current era, there are different types of accounting issues which are faced by the
companies in the market. Blackmore’s Company also deals with accounting issues due to which
the share prices of Blackmore’s are declining from past two years.
Share price fall
It is price of single share of the amount of profitable stocks of business, derivative or the
additional monetary assets (Mickelboro, 2019). The image presented below shows the share
price of Blackmore's company for two years.

Contemporary Issues In Accounting 4
(Source: Blackmores, 2020)
In the year January 2018, share price was recorded as 171.59 which denied continuously. It has
been found that the company broke all the records when the prices of share declined with 68.29
(Blackmores, 2020). This is the maximum decline registered by the Blackmore's company in
August 2019. Currently, share price of the Blackmore's is $86.48 which shows that there is a
continuous decline in share price of the company. The investors are not willing to invest in the
company because they will not get the returns and have to deal with high loss (Walton, 2019).
Thus, accountants find the issue as they need to arrange the funds for the company as well as for
their business. This is considered as one of the major leading issues which are faced by the
company.
New e-commerce law by China
In research, this has been witnessed that China’s new e-commerce law is introduced by China
government which affected the business operations of Blackmore’s company. Presently, business
is performing operations in China as there is a high need for the multi-vitamins and it helps in
attaining the high sales. The new law builds upon the legal system within China. One of the
essential features of the new law includes the registration of the online business and its different
actions such as sales of therapeutic drugs (Clark, 2019). The companies who are performing the
e-commerce operations need to encounter their responsibilities and now need to issue a tax. The
accountants of company deal with the issue as they need to obey all the rules and regulations for
which they need to pay the high amount on the legal regulations. To meet the rules and
regulations the accountant’s deals with the issue to manage the funds because it will cost the
most to the company and it is considered as one of the major expenses (Soo, 2019). The major
issue faced by the accountants include the china's e-commerce laws, as well as costs, are linked
with the restructuring and also Braeside acquisition is predicted to result in income for first-half
being below previous corresponding period.
Decline in sales
Revenue is one of the major factors due to which the companies can survive in the market. Sales
of the products help the company to attain high revenue and this is the reason due to which
Blackmore’s expand their business operations in the different regions. However, it has been
found that Blackmore's sales are declining in China. The sales of the company get affected which
leads to the issue for the accountant as they won’t be able to attract the stakeholders to show
interest in their company (Rankin, Stanton, McGowan, Ferlauto and Tilling 2012). The change in
laws affects the sales as it has dragged the Blackmore’s share price during the year 2019. Sales in
the china segment were down 15% on the prior year to approx. $122 million. The accounting
team of the Blackmore’s announced that net profit after tax for the year has been declined by
24% to $53 million for the year 2019 (Clark, 2019). The decline in the sales of the company
affects the business and their accountants. It has been found that decline in the sales drains the
working cash and contributes in improving the credit use. This shows that the accountants of the
company might find the issue in which they need to enter to the crisis mode for which they need
to increase the credit due to lack of the cash (Ashe-Edmunds, 2020). In addition to this, the cost
of interest remains high for the company which is considered as the expense that is paid by the
company for the loan or credit that has been taken by them.

Contemporary Issues In Accounting 5
Dividend slashed
Accountant of the company find the issue of decline in sales due to new laws that has affected
sales and ultimately the dividend amount. The company has announced a final dividend of the
amount $0.70 per share which an almighty from the last year's dividend of $1.55. This made the
shift in the shareholder interest within company. In addition to this, it has been found that the
company said that the trading conditions are likely to remain hard in their channels presented in
the china market (Schaltegger and Burritt, 2017). This is the reason that financially accountant
found that the financial year 2019 results cap-off a hard period of Supplements Company.
Moreover, the share price has afterwards skyrocketing in the year 2014 and 2015 which pulled
back significantly. In the research, this has been found that the investors have been hitting the
sell button even since the company released their results (Kennelly, 2019). The company found
the weakness in the market of china made the company fell short of the market's predictions.
Recommendations
 It is suggested to the accountants that they should try to cut some other expenses which
include advertisement cost, extra amount on the different campaign and many others. All
these expenses reduce the profit and there is a lack of management. Thus, the accountants
of the company should try to reduce all these expenses.
 The accountants should manage the proper records as well as the budget of the company
that is considered as the planning for their business operations. This will help the
accountants to work accordingly.
 The accountants of Blackmore’s company should make use of updated and new
technology or software. This helps the company as well as their accountants to easily
perform the operations and to manage all the financial data.
 The company should focus on improving sales in the other region of Asia as well as in
China by abiding all the rules and regulations.

Contemporary Issues In Accounting 6
Conclusion
At the end of report, it is summarized that there are different issues which are faced by the
accountants while performing the practice of accounting. It has been witnessed Blackmore’s
accountant’s deals with the wide range of issues and this is supported with the share price which
is declining. It has been found that the share price of Blackmore’s is declining and it is affecting
the company as they don’t get the investors who can invest in their business. This can be
summarised that the accountant deals with issue of new e-commerce law by china that leads to a
decline in sales of company and also the slashed dividend of the company. All these factors lead
to the issues for accountant who includes high expenses, high rate of interest, low sales of
product and many others.

Contemporary Issues In Accounting 7
References
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Blackmore’s, 2020. About us. Available at: https://www.blackmores.com.au/about-us [Accessed
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__cf_chl_captcha_tk__=4a389089072e72d10529aa73d50a8d45f97f194a-1579349040-0-
AREPwi1j_BcUcLqpf71UtFsk-
tBkrrb7ZgckCy2NG_DNk7XtZbVYMUTUo7WouHKDHmHCVs1LtLtB85_rg2uRllHJAAqzX
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Kennelly, L., 2019. Why Is The Blackmores Share Price Crashing?. Available at:
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Mickelboro, J., 2019. The Blackmores share price has been crushed in 2019: Is it time to buy?.
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Rankin, M., Stanton, P., McGowan, S., Ferlauto, K. and Tilling, M., 2012. Contemporary issues
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Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
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Soo, Z., 2019. Here’s how China’s new e-commerce law will affect consumers, platform
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