Accounting Report: Domino's Pizza Enterprise Issues Analysis

This report provides an analysis of contemporary accounting issues faced by Domino's Pizza Enterprises Limited. The report examines various challenges, including low sales, fluctuations in share prices, and issues related to dividend payments. It delves into the impact of these issues on the company's financial performance and overall growth. The report also explores the company's adoption of new accounting standards and their implications. Furthermore, it offers recommendations for addressing the identified accounting issues, such as conducting employee sessions, improving sales strategies, and enhancing the skills and expertise of accountants. The report concludes by summarizing the key findings and emphasizing the importance of addressing these accounting challenges for the company's success. The analysis is supported by references to financial reports and academic sources.

Domino’s Pizza
Contemporary issues in Accounting
1/23/2020

Accounting 1
Executive summary
In the current environment, companies find it difficult to manage all the operations and perform
in an effective manner. It is clear from the research that there are different issues which are faced
by selected company Domino's Pizza Enterprises Limited related to accounting. The findings of
the report show that there are different issues which are faced by the company accountants such
as low sales of dominos, payment of the dividends, and many other issues. Considering the
issues faced by the company, the recommendations for conducting sessions, improving sales and
enhancing the skills and expertise of accountants are included in the report.

Accounting 2
Contents
Introduction......................................................................................................................................3
Contemporary issues in accounting.................................................................................................3
Low sales of Domino’s Pizza Enterprise.....................................................................................3
Share price...................................................................................................................................3
Payment of dividends..................................................................................................................4
Other issues..................................................................................................................................4
Recommendations............................................................................................................................5
Conducting sessions and meetings for employees.......................................................................5
Improving sales............................................................................................................................5
Accountant’s skills and expertise................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Accounting 3
Introduction
The aim of the report is to reflect upon the current contemporary issues in the accounting which
is faced by the ASX Company. ASX Corporation that has been selected by the company includes
Domino's Pizza Enterprises Limited, which is the largest pizza chain in Australia when it comes
to the network stores number and network sales as well as the largest franchisee for the
Domino’s Pizza brand across the world. Domino’s Pizza Enterprises Limited is considered as the
largest pizza chain in the market of Australia in terms of both network store numbers as well as
sales of the network (ASX, 2019). DPE is an exclusive master franchisee for the network of
business in different areas. The accounting issues which are faced by the company are discussed
with the reference of the share price of the last 2 years. The issues in terms of accounting have
influenced the corporation share price during this time.
Contemporary issues in accounting
Domino's Pizza Enterprises Limited accountants deal with the different issues that are related to
the accounting which affects the growth of the company in the market (Bazley, Hancock, Berry
and Jarvis, 2013). The company is a well-known company who is performing operations across
the world.
Low sales of Domino’s Pizza Enterprise
The business found that significant component of the growth strategy is opening of the new
stores in the market which will contribute in improving the sales and other elements. However,
Domino’s Pizza Company is dealing with the issues in opening the new stores which generally
occur due to the availability of the financing with the acceptable terms. In the research, this is
clear that international sales of the company fell short while comparing it with the competitor
McDonald’s. The study on Domino’s Pizza Enterprises shows that in the year 2018, the company
presented their weakest first-half year profit growth in the 11 years. However, the market was
predicting the company to miss its net profit growth of 20% for the full year (Thomas, 2018).
This financial issue affects the company to the most as they cannot open their new stores.
In addition to this, the competitors of the company that is McDonald’s can bring the new
techniques through which they can grab the attention of the customers which contribute in
reducing the sales of the Domino’s Pizza (Domino’s Pizza Group plc, 2018). The low sales
affect the investors to the most as they need to plan the ways through which the company can
meet their upcoming expenses which are predicted to occur. The accountants find it difficult due
to which they raise the funds by offering the shares to the customers present in the company.
Furthermore, accountants can also raise the funds by taking the amount on loan which leads to
the improvement in the expenses of the company and contribute in declining the revenue of
Domino’s pizza company (Domino's Pizza Enterprises Limited, 2017).
Share price
On the hand, Domino’s Pizza Australia found that there is a 30% jump in the stock in the current
months provides the suggestion that is growing the confidence in the outlook for the business.
This shows that the improvement in the share price leads to new opportunities for the company.
The below given is the share price of the two years which include data of 2018 and 2019.

Accounting 4
(Source: ASX, 2019)
The share price of the company shows that there is fluctuation as prices of share are declining
from 2017 July which was high earlier. In July 2018, the prices of the share improved which
again declined in the month of July 2019 and started improving in January 2020 (ASX, 2019).
This proves that Domino’s Pizza share price is improving which shows that investors interest in
the company has been improved which leads to the rise in the capital of the company. However,
this has been found that earlier the share price of the company was low which was only possible
because of the company performance in terms of the financial elements.
Payment of dividends
The research of the PWC shows that the major issue that has been witnessed by the accountants
is related to the payment of the dividends in the contravention of the Companies Act 2006. The
payment of the dividends is required to adhere by the accountants of the company. The report of
research shows that the Domino’s Pizza group needs to become aware of the different issues in
the terms of the company’s procedures for making the payments of the historic dividends,
particular purchases of its own shares as well as support that are provided to the employee
benefit trust (Fuller, 2017). This leads to the breach of the Companies Act 2006 by the Domino’s
Pizza Enterprise. Every investor who makes the investment wants that the company should
manage the dividends in an effective manner as it will help them to get the amount that they have
actually earned from the investment done by them. This issue affects the other participants who
might be willing to invest their amount in the company as calculation of dividend is required to
be done in an effective manner.
Other issues
It has been found that accountant of the company is dealing with the issue of particular purchases
of their own shares as well as provide the support to the employees that benefit them in the form
of trust. There are many employees of Domino’s Pizza who wants to purchase the shares of the
company for which they make the investment but they need proper guidance (Domino’s Pizza,

Accounting 5
2019). However, the accountants of the company are not able to manage the shares of the
company and even don’t make the employees understand the way through which they can
purchase or manage their shares. This is one of the major barriers for the employees which affect
them in creating trust with the company (Hoque, 2018).
Considering the rising issues of the accounting, the company adopted a new revenue recognition
accounting standard in the year 2018 that need a company to report the franchise contribution for
the non-for-profit advertising fund as well as related expenses gross on the income statement.
The company adopted ASC 606 by making the use of the modified retrospective method.
However, it has been found that all these amounts are included in the incomes statement as they
are restricted funds that can only be used to take the support of the Domino’s brand as well as
not present to be used for the general corporate purposes (Schaltegger and Burritt, 2017).
Recommendations
Conducting sessions and meetings for employees
It is suggested to the Domino’s Pizza to conduct the sessions and meetings for the employees in
which they will get to know about the purchase or sale of the shares. It is essential for the
accountant to generate awareness among their members so that they can trust in the company.
This trust of the employees will help them to increase the level of productivity and performance
which helps the company in attaining the goals or objectives.
Improving sales
It is suggested to the company to bring the improvement in the sales for Domino’s Pizza
Enterprise by selling the new and existing products in an effective manner. The improvement in
the sales will help the company to reduce the financial issues and allows the company to open
new stores in the market (Reuters, 2017). Thus, for the growth of the business, it is essential to
bring improvement in the revenue.
Accountant’s skills and expertise
It is suggested to the accountants of the Domino’s Pizza to bring the improvement in their skills
and expert knowledge as this is the only way through which they can contribute in calculating
the historic data related to the payment of the dividend. This attracts the maximum investors
towards the company and they can easily get a high amount for future investment.
Conclusion
At the end of the report, it can be concluded that Domino’s Pizza Enterprise Company deals with
a wide range of accounting issues in the market while performing their business. The analysis of
the accounting issues has been done which helps in understanding the issues which are faced by
the accountants. All these issues influence the working of the business and this is the reason due
to which they need to improve the operations. Further, the recommendations to the company
have been provided which helps in reducing or eliminating the accounting issues and bringing
the improvement.

Accounting 6
References
ASX, 2019, DMP [Online]. Available at:
https://www.asx.com.au/asx/share-price-research/company/DMP [Accessed on 23rd January
2020]
Bazley, M.E., Hancock, P., Berry, A. and Jarvis, R., 2013. Contemporary accounting. Cengage
Learning Australia.
Domino’s Pizza Group plc, 2018, Annual Report & Accounts 2018 [Online]. Available at:
https://investors.dominos.co.uk/system/files/dominos-pizza-group-plc-ar18_0.pdf [Accessed on
23rd January 2020]
Domino’s Pizza, 2019, Who we are [Online]. Available at: https://www.dominos.com.au/about-
us/who-we-are [Accessed on 23rd January 2020]
Domino's Pizza Enterprises Limited, 2017, Half-year Financial Report [Online]. Available at:
http://member.afraccess.com/media?id=CMN://2A1064530&filename=20180214/
DMP_01950284.pdf [Accessed on 23rd January 2020]
Fuller, C., 2017, PwC takes delivery of Domino's Pizza audit [Online]. Available at:
https://www.accountancydaily.co/pwc-takes-delivery-dominos-pizza-audit [Accessed on 23rd
January 2020]
Hoque, Z., 2018. Methodological issues in accounting research. Spiramus Press Ltd.
Reuters, 2017, Domino's international sales miss estimates, shares slide [Online]. Available at:
https://www.reuters.com/article/us-domino-s-pizza-results/dominos-international-sales-miss-
estimates-shares-slide-idUSKBN1AA1DE [Accessed on 23rd January 2020]
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Thomas, J., 2018, How Domino's Pizza could disappoint and surprise in the same result
[Online]. Available at: https://www.afr.com/companies/retail/how-dominos-pizza-could-
disappoint-and-surprise-in-the-same-result-20180810-h13t8u [Accessed on 23rd January 2020]

Accounting 7