2014/15 accounts released - £10.7m profit

[Prestwich_Blue]

On the bright side, if you go on any Arsenal forum, every thread looks a bit like this one.

There's a bright side to going on an Arsenal forum?

 

[andyhinch]

Ye

There's a bright side to going on an Arsenal forum?

Yes logging off :-)

 

[tonea2003]

Soz if I have got the wrong end of the stick but I was assuming the £113m above must cover some element of transfer fees. I do agree that directors can make a judgement about what liabilities need to be included when it comes to contingent liabilities / provisions etc.

the bottom line is, certainly in the case of sterling is that we want to pay the extra 5 mil wherever its accounted for as we would have won the prem another couple of times and bagged the champions league as well making a shed load more money to cover the extra layout in doing so.

 

[Chris in London]

There's a bright side to going on an Arsenal forum?

Oh yes.

It's always a hoot going on threads such as 'player losses and amortisation', 'FFP is next to godliness', 'why stadiums in public ownership should not be used to subsidise football clubs', 'season tickets: should we be paying more?' and my personal favourite, 'balancing the books > balancing the side'.

If they hadn't won the FA cup two years ago they were going to have an open top bus parade anyway, showing off their balance sheet.

 

[Prestwich_Blue]

Soz if I have got the wrong end of the stick but I was assuming the £113m above must cover some element of transfer fees. I do agree that directors can make a judgement about what liabilities need to be included when it comes to contingent liabilities / provisions etc.

It took me a while to understand this so don't apologise but there will almost certainly be some element of conditional transfer fees in that figure, as well as bonuses. As you say, there has to be an element of judgement relating to if and how you record contingent liabilities.

So if we had a clause in the Sterling transfer in that paid out £2m if we won the PL once in the next 5 years, £2m if we won the CL and £1m if the player won the Golden Boot, Ballon D'Or & World Cup within 5 years, I guess you'd class the first as probable, in which case you'd both account for it and put it in a note, the second as reasonably possible, in which case you'd just record it as a note and the third as unlikely, in which case you'd do nothing.

 

[FogBlueInSanFran]

Oh yes.

It's always a hoot going on threads such as 'player losses and amortisation', 'FFP is next to godliness', 'why stadiums in public ownership should not be used to subsidise football clubs', 'season tickets: should we be paying more?' and my personal favourite, 'balancing the books > balancing the side'.

If they hadn't won the FA cup two years ago they were going to have an open top bus parade anyway, showing off their balance sheet.

Arsenal fans have become masters of rationalization. I regularly congratulate them on winning the Best Business Model Cup.

 

[Rolee]

Oh yes.

It's always a hoot going on threads such as 'player losses and amortisation', 'FFP is next to godliness', 'why stadiums in public ownership should not be used to subsidise football clubs', 'season tickets: should we be paying more?' and my personal favourite, 'balancing the books > balancing the side'.

If they hadn't won the FA cup two years ago they were going to have an open top bus parade anyway, showing off their balance sheet.

And they talk about ruining football? If anything it's the obsession with the money in the game from media and fans that's ruining it rather than the money itself.

 

[PrestwichPeteMcfc]

Don’t want to pick holes but for the sake of clarity there is no such thing as a contingent asset. Assets have to be represented in the books at fair value. Sterling will go in the books as a £49m asset, on the liabilities side of the balance sheet cash is reduced by £44m and the contingent liability forms the balancing figure of £5m. Net movement on the bottom line is Nil.

If we have to pay out the extra £5m, cash would go down by £5m and the removal of the £5m contingent liability would be the balancing figure, it would mean there is no change to the bottom line if we pay out in future. The effect is that the full cost of the acquisition is factored into the accounts on day 1. There is nothing unusual about this, its standard stuff.

I mostly agree with you, just one point - there is such as thing as a contingent asset - they can't be recognised but must be disclosed when the cash inflow is probable. E.g. If there was a clause in Lopes' transfer contract that said we'd receive £10m after he'd played 30 games, and he'd played 29 games at year end, we'd have to disclose the potential inflow.

 

[andyhinch]

T

Arsenal fans have become masters of rationalization. I regularly congratulate them on winning the Best Business Model Cup.

The financial prudence award is something to applaud :-)

 

[Saddleworth2]

Expert analysis of the accounts by the brilliant Swiss Ramble. Interesting read, as always.

http://swissramble.blogspot.ch/2015/10/manchester-city-modern-world.html

That is such a well presented explanation of our accounts. It's also obvious from the match day revenue that our owners are keeping season ticket prices at a fair level in comparison to the rest of the premier league. What is the latest on the potential Etihad and Nike contract negotiation, does anyone know? They set out their vision from day 1 and they have absolutely delivered on every promise.