Assignment 1 Draft Step One and Three
- Daniel Doyle
- Mar 31, 2025
- 14 min read
Updated: Apr 9, 2025
KCQ 1 – How we learn Many of us can see our learning as simply regurgitating clear-cut, black-and-white facts from experts.
This resonated with me deeply as it sums up the learning I undertook in primary and high school, particularly in classes such as chemistry and biology. Reflecting on my previous schooling, I realise I am guilty of ‘vacuuming cleaning’ my brain after exams. If someone were to ask me questions about chemistry or biology, they would likely be met with a blank stare. The study guide asks, 'Is this real learning?’ and I would have to answer with a no.
However, when I reflect on the learning I undertook during my chef apprenticeship and beyond, I would say that the opposite is true. Although I would have to admit there were portions of learning clear-cut facts, that were reinforced with real-world experiences in kitchens and an understanding of why food elements interacted the way they did. For example, I learned how to make ricotta cheese. While it is true you could reduce it to “heat milk, cream, salt and add lemon juice”, understanding how and why these ingredients interact together opens up a world of possibilities in cheese making. What if I boiled the milk for longer? What if I the strained curds for longer?
As I begin to explore accounting, I am starting to realise that accounting is more complicated than cooking. I find myself asking the question of how I can apply ‘understanding the why’ behind accounting principles the same way I have with cooking techniques. Additionally, can you have a deep understanding of a topic without real-world experiences or are hands-on experiences essential?
KCQ 2 - The world of online communication is changing very quickly. The internet is powerfully disrupting all industries, including accounting.
This is something I agree with as I have experienced firsthand how online communication has changed some industries. For example, when I need to see a doctor, I can attend my appointment using Zoom, which is a blessing when my local doctor has no appointments. However, I also agree with Martin’s quote, ‘And online there are no physical cues – unless we are using video synchronously, where these cues are still somewhat limited’. This resonates with me as even though I can attend doctor's appointments using Zoom, I also find it very difficult to connect with my healthcare professional on a human level, and that lack of connection makes it difficult to build trust.
When I think about accounting, I imagine that a significant amount of communication happens between the firm and the client. This may be the only way the firm and client can communicate if, for example, the client lives in a remote area or is overseas. However, this may not be the ideal way to communicate with clients, especially with new clients who have not had the opportunity to build trust in the firm.
From my perspective, I believe that trust is important, especially when accountants are taking care of a business's finances. When I think about this scenario, I wonder if it would be better to hold face-to-face meetings with new clients to connect and build trust? What can we do to make online communication more enriching for clients? How can accountants ensure security when using digital tools such as Zoom?
KCQ 3 – Businesses are everywhere
This idea stood out to me. Until now, I never really gave much thought to how many different businesses are operating in my local area and how those businesses are keeping track of their accounts. After reading Martin’s anecdote about the businesses in Yeppoon, I decided I would pay more attention to the businesses I drive past on my way to work. I was surprised as it seemed like I was driving past more businesses than houses. I took note of large businesses such as Woolworths and smaller businesses such as The Goat Bar and Café, thinking about how those businesses would keep their accounts. That is when I realised that the number of transactions happening between consumers and businesses would be staggering, and considering that all those transactions would need to be recorded and balanced, accountants must be in an incredibly high demand.
I wondered at what point a business reach out to hire accounting services? Does the business reach out to accounting firms or do firms aim to onboard clients proactively? Is the size of a business the main indicator of whether or not they use accounting services? Considering the rise of artificial intelligence, what role could it play in the relationship between businesses and accounting firms?
KCQ 4 – Measure of Value - Value is a central concept in all our lives and we have a wide range of opinions and views about what is important, or valuable, or worthwhile in life.
This stood out to me, and I agree with Martin’s quote. While accountants seek to put dollar amounts on the value of a firm, I started to think about how some businesses might offer ‘social value’ that is not represented in financial statements. For example, I remember talking to my father about outback towns whose local economies relied on the gold mines. When the mines closed, people moved away to find other work or they lost their jobs. As a result, local businesses established to offer services to the local community closed as they could no longer stay in business without the bulk of the community being employed by the gold mine.
This made me wonder: Does accounting try to measure this type of value, or does it only measure the financial aspects of a business? Can accounting truly measure the value of a business, or is some value beyond financial measurement? If accounting can, how is that represented as a dollar amount?
Step Three
Dunelm Group PLC Annual Reports:
Initial Thoughts
When I first saw the company list and found my company, I remember thinking that I had never heard of this company before, and that made me feel a small amount of stress. However, I noticed Dunelm was in the retail sector, and I felt more at ease, considering I had spent some time in retail. I began getting familiar with my company by first exploring the history page on their website. I learned that Dunelm started as a market stall in the high street selling curtains, bedding and slippers. Eventually, it grew over time to a chain of homeware stores across the UK. Interestingly, Dunelm took 23 years to open their 50th store but only 8 years to open their 100th. I considered how fast the company had grown and how much profit it would have to facilitate such growth. I wondered what impact Dunelm’s growth had on its financials and what challenges they faced during the recent cost-of-living increase regarding sales and revenue.
Today, Dunelm has recently celebrated opening its 200th store in Merthyr Tydfil. Upon further investigation of the history page, I found a link to the company's TikTok, which led me to a mix of product adverts, competition giveaways and how-tos. I figured that most companies would have some social media marketing in 2024, and I wondered if Dunelm’s social media presence led to noticeable sales growth and if it was part of their overall strategy. I began to question if their digital engagement was a response to consumer habits or a part of a long-term strategy.
The Annual Reports
Given the size of the report, I immediately went to “the chair’s statement”, hoping to get a general idea of what was happening at Dunelm. During the 2024 period, Dunelm noted the turbulent political and economic environment and its impact on consumer confidence. I have to admit, I initially had no idea what caused this in the U.K., so I began researching and found that after the election, consumer confidence saw a brief uptick but quickly fell after messaging from the government noting economic challenges. What I found interesting was how messaging from the government could impact consumers and, therefore, companies.
Despite this, Dunelm saw a 4% increase in sales to £1.7 billion, driven by “increased volumes”. Furthermore, Dunelm saw a 7.7% increase in market share, a 7% increase in profit before tax and a 3.6% increase in ordinary share dividend. However, according to Dunelm, the rise in corporation tax in April 2023 caused the diluted earnings per share fall 0.8%. From my perspective, that did not seem so bad, considering the revenue the company saw in 2024.
Identify areas of your firm’s financial statements you are having difficulty understanding
One area I struggled to understand in Dunelm’s notes was the references to amortisation. I noticed it was often used alongside depreciation, which I felt I had a general understanding of, but I could not find a clear explanation of amortisation on the annual reports. Another area I am having difficulty understanding is in the notes section of the document where depreciation is calculated. I always thought depreciation was generally items losing value over time; however, on page 141 of the annual report, it appears that depreciation is calculated as a 23.6-million-dollar credit. I had always thought it was supposed to be the other way around.
Additionally, when analysing Dunelm’s liabilities, I felt I was not getting a clear picture of what liabilities they held. I could see that Dunelm had lease liabilities, which seemed to be the leases that Dunelm held for physical stores, but other than that, I could not see much else. For example, if Dunelm employees are full-time workers, then would those workers' annual leave be considered a liability? Furthermore, would long service leave and contract retrenchment clauses also contribute to the companies' liabilities?
Areas of its business that seem most critical to you
To get an idea of the areas that may be critical, I looked again at the chair's statement and the CEO’s review. Considering it was the first bolded heading in the chair’s statement, I felt that Dunelm placed high importance on its performance and revenue, which made sense. However, I also felt that Dunelm was committed to reducing its impact on the environment, noticing it made a point to mention its “full circle sofas”, which are designed to be taken apart and recycled at the end of life. Furthermore, a critical part of Dunelm seems to be its focus on communities and people, considering its Christmas gift-giving campaign and its focus on being an inclusive employer and launching its “reach” program to advance skills within underrepresented ethnic groups.
Upon reading the CEO’s review, I felt that another important part of Dunelm was expanding its store real estate and its ability to sell more products to consumers online while avoiding shipping disruptions. At this point, the annual report mentioned shipping disruptions several times. Having fairly weak geographical knowledge of the world's oceans, I was confused as to what they were referring to; so I decided to research it and was shocked to discover that Houthi attacks on shipping were disrupting trade in the area. How do businesses plan around something like that without greatly increasing costs?
Key challenges the firm appears to be facing, how successful it appears to be in meeting these challenges
The Dunelm Group has identified several risks to its business, with many of those risks remaining stable. However, Dunelm reported an increased risk for business change and supply chain resilience in 2024, showing growing challenges for the company. Dunelm has described business change as digitising the business and has invested in improvements to drive growth and efficiency. The annual report mentions that failing to leverage new technologies, processes and organisational changes may result in reduced efficiency, competitiveness, relevance and growth. Dunelm plans to mitigate this risk by investing in digitisation and the ongoing simplification of processes and systems.
Dunelm has recognised that it is dependent on complex global supply chains to deliver products to customers, and instability in the global supply chain or the failure of a key supplier impacts supply chain resilience. Dunelm plans to mitigate this risk by reviewing its supply chain strategy, monitoring for emerging risks that may lead to disruption and actively managing and engaging with suppliers.
Dunelm’s strategy
When I first looked at Dunelm’s strategy, I was met with a friendly-looking graphic displaying the three pillars: “Elevate our product”, “Connect with more customers”, and “Harness our operational capabilities”. I immediately thought, “OK, but what does that mean?”. After further analysis, I found that “elevating our product” included offering more sustainable options for consumers and aligning with the company's focus on reducing emissions. This also included increasing the number of “own brand” products with the conscious choice label. I felt I understood the general gist of what the conscious choice label was, but I decided to dig a little deeper and found that it signifies products that contain one or more responsibly sourced materials and meet the minimum environmental standards of Dunelm’s responsible sourcing policies. What I found interesting was how committed Dunelm seemed to be to being an environmentally conscious company, and I wondered if that carried an increased cost for the company.
The next pillar was “connect with more customers”, which included three focus areas. To align with this pillar, Dunelm is focusing on product development, increasing its curated ranges and innovating in sustainable materials. This made sense to me as if a company has the infrastructure to produce its goods sustainably, then to me it made sense to focus and invest in that area.
Secondly, Dunelm is opening more stores and developing digital channels to reach more customers and noting the importance consumers place on online shopping. Lastly, Dunelm is working towards introducing more automation and productivity tools throughout the business to drive efficiency. What stood out to me was the focus on automation. The annual report cites automation reducing the volume of calls in their customer support centre, which makes sense to me; however, I wondered what other areas Dunelm would likely automate and what that would look like. Additionally, I thought about the financials of Dunelm and how much of this was “new money” coming into the business and how much was efficiency savings.
What similarities or differences are there between your firm and the firms of other people and in the way they present their financial statements?
To explore the similarities and differences of how other firms present their financial statements, I decided to look at Harvey Norman. The length of the annual report was roughly the same, with Harvey Norman presenting a 159-page report compared to Dunelm’s 162-page report. Generally, Dunelm and Harvey Norman included similar aspects of their annual reports, such as a statement from the chair and CEO, renumeration reports and sustainability reports. Interestingly, Harvey Norman presented their renumeration report much earlier in the document than Dunelm and their sustainability reports much later. This gave me the impression that Harvey Norman valued renumeration results much more than their sustainability results.
Comparing the statements of changes in equity between the two companies, Harvey Norman seems to have much larger changes in equity, totalling almost 4.5 billion dollars compared to Dunelm’s 137.9 million pounds. I took a moment to reflect on the size of my company and how, when compared to companies such as Harvey Norman, Dunelm is comparatively small. Looking closer at the statement, I noticed that Harvey Norman recorded different items in their changes of equity statement; for example, “fair value of exchange contracts” appeared only on Harvey Norman’s statement and not Dunelm's. Something I found interesting was that while several items were labelled differently, they might mean the same thing. For example, “Movement on cash flow hedges transferred to inventory” and “reverse expired or realised cash flow hedge reserves” are two items that illustrate this point.
I remember reading in the study guide that “Each of us are different and we will see that firms and their financial statements are each different as well”. I decided to take a closer look at what governed the reporting of financial statements. Remembering the study guide, I decided to compare Harvey Norman and Dunelm on the IRFS website and fell somewhat down a rabbit hole. Furthermore, I decided to look at the guidelines for both Australia and the UK and found they both required companies to comply with the IRFS 10. Looking closer at the IRFS 10, I was taken aback, and I struggled to make sense of the document.
I attempted to find something simpler to digest and came across the IAS 1 Presentation of Financial Statements, which defines the minimum requirements for the presentation of financial statements. Something I found interesting was that firms needed to present statements of financial position, profit and loss, comprehensive income, changes of equity, cash flows and the accompanying notes. However, there were no guidelines on the individual line items that needed to be included. Reflecting on this, I thought that it made sense not to have guidelines on items as different companies operate in different sectors, with different priorities, and hold unique liabilities and assets. From my perspective, the financials of different companies are complex, requiring the need for generalised guidelines instead of specific requirements on individual items.
News Articles, Blogs and Videos about Dunelm
I initially found it quite challenging to find news articles, blogs and videos outside marketing material. However, after searching, I found an interesting video discussing Dunelm’s focus on upgrading its digital presence. The video is an interview with Dunelm’s principal engineer, Mark White, and discusses Dunelm’s transition from on-premise servers to a serverless, cloud-based system. According to the interview, this shift is about capitalising on online market opportunities. By doing this, Dunelm hopes to improve operational efficiency and responsiveness. This was interesting because it highlights a key part of Dunelm’s strategy involving expanding online market opportunities. Furthermore, it will be interesting to see how a move to cloud-based systems impacts Dunelm’s long-term growth and if this directly impacts revenue in the future https://www.youtube.com/watch?v=_L_Z36ZOoYQ.
This article discusses Dunelm’s partnership with the Salvation Army to launch an online textile takeback program aimed at reducing waste and recycling unwanted textiles. The program allows customers to generate free shipping labels for bedding, cushions, blankets and unwanted clothing. Those textiles are sent to the Salvation Army to be resold or recycled, and profits from the program are donated to the Salvation Army. This program is interesting as it aligns with Dunelm’s sustainability goals by reducing waste and making recycling unwanted textiles easier, which promotes environmentally responsible behaviour. https://corporate.dunelm.com/news/2024/dunelm-tackles-home-textiles-waste-in-partnership-with-the-salvation-army/
Are you happy with the firm you have been given?
When I first noticed my company was Dunelm, I was relieved to be handed a retail company. However, I was unsure how I would fair, considering I had never heard of the company before and had little interest in furniture. I would have preferred a food company or electronics company. As I explored the annual reports, neither of those concerns mattered, as I found that my concerns were surface level. After a few hours of reading, I found myself growing more interested in Dunelm, especially in its sustainability strategies. I grew more impressed with the company as I read more about its commitment not only to revenue and growth but also to people and community responsibility. By the end of my research, I realised my uncertainty was giving way to a liking of the company due to its focus on social responsibility.
What concerns, if any, do you have at this stage?
In the beginning, I did have some concerns about the size of the annual report and whether I would be able to make sense of it. Furthermore, I was concerned about the amount of time it would take to properly get an idea of what my firm did, its strategies and what its critical areas were. Additionally, I found it challenging to find blogs, articles or videos about Dunelm that were more than marketing. However, after spending the time reading the reports and searching for information about Dunelm, my concerns have abated. While it took some time to get my head around Dunelm’s reports, I found that when I was exploring Harvey Norman’s annual reports, I was much faster and more confident. Overall, what originally felt like a daunting experience, has given me more confidence in understanding the complexities of businesses.
Studiosity
I have had the opportunity to use Studiosity in previous units, and I find it incredibly helpful. The ability to submit drafts to get feedback almost instantly is an amazing tool for students. After I submitted this document to Studiosity, I quickly received feedback on areas I needed to improve. This is important to me as, after reading and re-reading the same document multiple times, it is easy to lose perspective and overlook errors such as imprecise language and grammatical mistakes. Overall, I find Studiosity very useful, and I will be using it again in the future.
My Three Favourite Blogs
Cole Argus - https://coleargus.blogspot.com/
Exploring Cole’s blog was an enjoyable experience. Upon first accessing the link and the home page, I could not help but smile as I was met with a picture of Cartman with the text “God, I hope this works”, a sentiment I shared when setting up my blog. Digging into Cole’s Step 2 – 5, I felt the writing was engaging and well structured. Furthermore, Cole’s reflections seemed honest, and I enjoyed being led through the analysis of Bega Cheese.
Makayla Bellwood - https://makaylabellwood.wixsite.com/my-study-1/blog
Landing on Makayla’s blog was a treat. The first thing I noticed was the photo of the three puppies, and I thought, “Those are some happy looking dogs”. Exploring the assignment one draft, I particularly enjoyed Makayla’s reflections on rules and how not everything is black and white, as I have experienced these situations in my career. I look forward to seeing how her blog develops over time.
When I opened Aonghus’s blog for the first time, I was happy to see such a clean and minimalist design, especially after digging through Dunelm’s annual reports. I downloaded the KCQ’s and I enjoyed the analogy of learning to drive being used to describe mistakes, correction and learning. Furthermore, I enjoyed the reflection on Aonghus’s grandparents' small business when discussing how some firms choose to outsource their accounting needs, as I felt it added depth. I can not help but cheer Aonghus on when reading about carrying on his late uncle’s legacy and I wish all the best for your future studies.
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