Limitations of Financial Reporting
Domino’s has identified the one-off significant expense of $12.7 million for the acquisition of Joey’s Pizza, Domino’s Germany and Pizza Sprint as well as a one-off cost for redundancy incurred due to the relocation of Paris Commissary.
Operating lease payments are recognised as an expense. However, financial leases may be capitalised. Also borrowing costs related to the acquisition, production or construction of qualifying assets and that take a substantial period of time to be ready for use, are added to the cost of these assets through capitalising.
The value of goodwill was very relevant when purchasing Joey’s Pizza, Domino’s Germany and Pizza Sprint. Historical costs are used to value assets in the annual report, except for some properties that have been adjusted at fair value at that point in time (that is, the current resale market value of the item).