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Discussion in 'Transfer forum' started by Daz_Blue, 4 Jul 2017.
My guess is that it's not readily calculable without knowledge of the previous add ons and when they kick in.
We've spent a fair amount in the last few summers where part of the cost will be attributable to this accounting period. This years net spend will tell us how much we are spending, when it is accounted for is of secondary importance
But what we are spending is totally irrelevant.
You could argue that any discussion here on who we get is irrelevant because it won't affect what the club do. However the cost of players is of interest and to my mind significantly more interesting than how they are amortised unless you are carefully scrutinizing the accounts.
It depends if you just want to see a big figure with zero relevance or if you want to have a look and see what the actual effects of purchases and sales are having.
We could but five players for £100m each but sell five players for £20m each and assuming their contracts were five years and wages the same then we could actually break even.
It's what many fans don't get when they ask how we can afford to spend £300m on transfers when our operating profit was 1/4 of that last season.
The big figure on the fees for players is the difference between the buying and selling price. The cost will have to include wages agents fees etc.
All the amortisation does is state when we mark down the asset it has no effect on the cost.
PS in your example above there is no reason to suppose we are breaking even ' with amortisation' unless we are in the rather unlikely situation of all the other players on our books having already been fully amortised which they clearly are not.
Hence the extreme example to make a point and careful use of the word "could" rather than "would".
The amortised cost is far more important than the net transfer spend. The "big figure" is useless as I stated and may I remind you that it's you replying to my question to the OP.
They're both important in their own way. Amortised costs impact the bottom line and therefore potentially FFP. The net cost is important as we now have to fund transfers from our own resources rather than relying on Abu Dhabi to fund them.
Well there cannot be an amortised cost at the time of transfer of any of our purchases.
There has been no time period to amortised them. All that will happen is they will be accounted as a footballing asset rather than a cash asset.
I don't see why the net cost is useless we are not trying to produce annual accounts but see how much we are spending.
Please correct me if I am wrong (I am no accountant), but they are also related aren't they. If we spend for example 300 million this summer, depending on the contract lengths, this money will hit our accounts in the next years. If for simplicity all players we bought would get 5 years contracts, we would see a 60 million impact in each of the coming 5 years as a result of the 300 million outlay this summer. The 60 million is what we will have to make sure is financed in the future bottom lines, because this money counts for FFP.
I have not touched upon the subject of wages here, obviously that is also important.