City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

[OB1]

Haha no ACCA, but as you know it's a balance between prudent estimates and what the board want.

True ;-)

 

[OB1]

Its no longer on the accounts as debt because its not a debt - it's a charge.

How do you figure that?

City's last set of accounts refer to net borrowings of £66 million at the balance sheet date.

Do you think net borrowings are something different to debt?

The financial statements also show net debt of £47.6 million (i.e. net borrowings less cash on hand).

I've not read it yet but I'm pretty sure IFRS16 is not doing away with finance leases.

The point about City's borrowings is that they relate primarily to the lease for the stadium rather than, say, cash borrowed to buy players. Practically speaking they are rather different because we have not actually borrowed money to buy the stadium: we are renting it; however, the accounting treatment is that we have to treat the stadium as if we had bought it. Of course, if City were allowed to buy the stadium, they would presumably fund the purchase through the issue of share capital rather than by borrowing but you cannot present accounts on the basis of what you would do if...

 

[OB1]

I'm wondering about the line regarding 'everyone using the same accounting methods' & exactly what that means.

We have the CFG, which is consolidating City's strength around the world & threatening all kinds of nighmares for these ****s (who can't afford to set up their own similar organisation) & I'm pretty sure that these fuckers are absolutely desperate to put a stop to it, if they can find a way.

UEFA have no power to dictate accounting standards or company law. I suppose they could try and insist on all clubs in European competition using IFRS but GAAP's are generally converging anyway. However, they can ask clubs to show them adjusted profit / loss figures for FFP purposes. Indeed, isn't that already what happens? IIRC, you can exclude certain expenditures from the FFP profit figure.

 

[Fuzzy80]

I think it's in the rear view mirror this one, whilst it has certainly been relevant we have passed it and the squad does not need major investment as it once did.

I loved the line someone put you can only spend if you have history (as that seems exactly what they would do, everyone there is self-serving). However, it cannot.

For the good of ourselves we need to align with the other English teams as other teams are scared of our wealth (something stupid like all 20 PL teams are in the highest 30 turnover). We need to ensure nothing is done to change this, Real and Barca have had their huge independent deals for years.

PSG is who this is aimed at, we are yet to take a real star of the golden boys in their prime and that stung, the loan for Mbappe (only not payable if PSG go down, I believe) added salt to the wound. I still think they do very well getting their £100 million tourism partnership put through the books for FFP.

I do think lessons have been learnt by the establishment and if for example Everton owners wanted to mirror what we did (which has proved a commercially viable business in the medium term) they would not stand a chance.

Good for City but not great for the sport as a whole in my view!

 

[Neville Kneville]

UEFA have no power to dictate accounting standards or company law. I suppose they could try and insist on all clubs in European competition using IFRS but GAAP's are generally converging anyway. However, they can ask clubs to show them adjusted profit / loss figures for FFP purposes. Indeed, isn't that already what happens? IIRC, you can exclude certain expenditures from the FFP profit figure.

I'm wondering if they will try to interfere with us paying money to the CFG for various services etc & find a way of making that & some of our other dealings with the cfg into a breach of future rules.

Bringing in unique artificial restrictions which you don't see outside UEFA, hasn't been a problem for them so far & the CFG is unique to City, so something they could shit on, without it touching Utd or Bayern Munich etc.

 

[aguero93:20]

I'm wondering if they will try to interfere with us paying money to the CFG for various services etc & find a way of making that & some of our other dealings with the cfg into a breach of future rules.

Bringing in unique artificial restrictions which you don't see outside UEFA, hasn't been a problem for them so far & the CFG is unique to City, so something they could shit on, without it touching Utd or Bayern Munich etc.

They can't do that either, intercompany charges are normal and defined in IAS 21,24,27,28 and IFRS 2 quite clearly (iirc the individual standard numericals), all of which have been adopted by the the EC.

 

[aguero93:20]

I still think they do very well getting their £100 million tourism partnership put through the books for FFP.

£200m, £100m allowed. We got interrogated over <£50m in Abu Dhabi related deals including stadium, shirt and campus sponsorship, but then again, we didn't have Platini's backing.

 

[Neville Kneville]

They can't do that either, intercompany charges are normal and defined in IAS 21,24,27,28 and IFRS 2 quite clearly (iirc the individual standard numericals), all of which have been adopted by the the EC.

Surely they couldn't do any of the stuff they have already done either ?

 

[aguero93:20]

Surely they couldn't do any of the stuff they have already done either ?

They pushed their luck. The rags have a holding company, as do Bayern, every Italian club, Atleti, PSG, Chelsea, Liverpool etc etc. Those transactional charges will be regular in all of them. We didn't create that company to dodge costs, we created it as best possible practise for a unit of staff that are used by multiple companies under the same entity. We still shoulder the majority of costs for it as we're the primary users.

 

[SilverFox2]

They pushed their luck. The rags have a holding company, as do Bayern, every Italian club, Atleti, PSG, Chelsea, Liverpool etc etc. Those transactional charges will be regular in all of them. We didn't create that company to dodge costs, we created it as best possible practise for a unit of staff that are used by multiple companies under the same entity. We still shoulder the majority of costs for it as we're the primary users.

Is the ability to transfer profits to loss making cos useful as well particularly when we do not need to continue our max investment policy ?