The current study aims to examine the adherence to accounting directives and principles along with the general purpose with particular orientation to the business concern Domino’s Pizza. Domino’s Inc is essentially an American pizza restaurant chain serving worldwide is necessarily a publicly traded corporation traded as NYSE: DPZ, S&P 400 Component. According to recent news, Domino's can be considered to be a large Australian corporation to remain under inspection for controversial deals with particularly Shop, Distributive and Allied Employees Association (SDA). Recent reports also reveal that Domino's Pizza workers are also missing out on penalty having value approximately $32 million a year owing to previous deal between the corporation and the shop assistants' union. Experts are of the opinion that Domino’s that does not make payments for penalty rates for extra hours of work once forced to disburse additional $32 million might face issues with maintaining profitability.
Analysis of Financial Statements
Evaluation of the financial statement of the corporation Domino’s reflects the fact that the company is a for profit corporation and Domino’s Pizza Enterprise Limited is a corporation domiciled particularly in Australia. The half yearly financial report of the corporation is necessarily a general purpose financial statement that is prepared as per the Corporations Act of the year 2001 as well as the AASB 134 Interim Financial Reporting. Essentially, the compliance with the standards mentioned in the AASB 134 helps in making certain adherence to the principles of International Financial Reporting Standard that is IAS 34 interim Financial Reporting. In actual fact, the accounting policies as well as methods of enumeration that are adopted for the purpose of preparation of half yearly statement are also consistent with the ones that are adopted as well as disclosed by the group’s annual declaration (Loyeung and Matolcsy 2015). The company’s pecuniary pronouncements also reflect the fact that the accounting policies are also are in line with the Australian Accounting Standard as well as the International Financial Reporting Standards.
Analysis of Employee Compensation
The state laws govern diverse operations of the operation of the entire business. Therefore, the company is supposed to abide by the Fair labour along with different regulations governing matters such as minimum wage requirements, workers’ working conditions, payments for overtime. In addition to this, financial statements of the firm also replicate the fact that there is equity based system of compensation as mentioned in the consolidated statement founded on the approximated fair value of the company’s rewards (Newberry 2015). In addition to this, the present equity incentive plan of the company also generates benefit for the employees of the firm as well as the directors. Further, the company also registered non cash compensation expenditure recorded in the general as well as administrative expense.
The financial declaration of the corporation shows that the company issues share capital under employee share option plan and share based disbursements are also recognized in the statement. The report also reveals that the corporation sanctioned of the executive share as well as option plan in the process of recruitment, reward as well as retention of different directors along with executives. Again, the financial statement also specifies that subject to any kind of adjustment during the issue of bonus, the issue of rights or else reconstruction of company’s capital, option of the company can be converted to ordinary share (Sutherland 2017).
Thus, it can be hereby mentioned that as per standard AASB 2 (share based payments) there is specification in the financial reporting by a business entity whenever it carries out a transactions based on share based payment (Henderson et al. 2015). This standard is necessarily applicable to business entity that has the need to prepare financial pronouncements as per part 2M.3 of particularly Corporation Act and is a reporting business entity. In addition to this, this standard is also applicable to general purpose financial reports of one another reporting entity and the financial assertions are necessarily general purpose financial reports.
As per AASB 119, employee benefits include different types of considerations provided by a business concern particularly in exchange of services rendered by their employees or for the purpose of termination of employment (Hodgson and Russell 2014). However, AASB 119 is not applied by a specific employer for the purpose of accounting various employee benefits in which AASB 2 share based payment is applied (Barth 2015). In the financial statements, a specific liability is documented for benefits to employees with regard to wages as well as salaries, yearly leave, leave for long service, as well as sick leave when it is likely that an arrangement will be obligatory and that can be measured consistently (Jin et al. 2015).
The financial statements of the firm also states that deferred tax assets or else liabilities along with assets or liabilities associated to employee benefit are detected and enumerated as per AASB 112 Income Taxes along with AASB 119 Employee Benefits respectively (Budding et al. 2014).
Fair value for enumeration and/or for purposes of disclosure in the consolidated financial statements of Domino’s is primarily determined on such a base, excluding for transactions related to share-based payment that are contained by the capacity of AASB 2.
Analysis of Issues with the Employee Compensation
However, certain issues can be detected with the remuneration of the employees of the corporation. Domino's is regarded as latest large Australian corporation to come under inspection for controversial agreement with the Shop, Distributive and Allied Employees Association (SDA). Reports reveal that Domino's Pizza employees are missing on rates of penalty amounting to $32 million each year owing to an arrangement between the corporation and the shop assistants' union. Investigation of the Fairfax Media discloses that the agreement with the union have led to hundreds as well as thousands of low paid employees that are denied of diverse penalty rtes as well as higher casual holdings (The Sydney Morning Herald 2017). Consequently many of the employees are paid significantly less than the award that is essentially the basically the safety net. As per report, retail analyst of the Deutsche Bank has also warned that the corporation might face a blow out as this is against the wage bill. The company Domino’s that is not paying the penalty rates can be forced to renew the outdated the agreement with the SDA. Retail analyst has also approximated that disbursement of additional $32 million as wages might slash profitability of the corporation by nearly 25%. Reports also reflect that agreement with the staff of Domino's was struck during the year 2009, before the implementation of the national award system that established novel minimum standard for the fast-food business, counting penalty rates. However, Domino's has sustained to legally function on the agreement, although it has run out and disburses by and large rates that are well beneath legal minimums. Again, workplace deals in Australia also have the need to go by the "better off overall test", aimed to warrant employees are paid more as per the workplace deal than the award (The Sydney Morning Herald 2017).
In conclusion it can be said that Management of Domino’s has now admitted that the overall cost of disbursing penalty rates was unknown to them and can be higher than the approximated figures presented by the Deutsche Bank. Retail analysts are of the view that Domino’s disbursed only $18.99 per hour and no penalty rates and that is significantly lower than even the award. So, this in effect implies any worker is necessarily worse off under the deal than under the fast food novel award. However, SDA has declared that they are set to strike a new deal that meets the minimum legal necessities.
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