penalty spot
Well-Known Member
- Joined
- 8 Oct 2009
- Messages
- 1,038
No, his sell on value will be whatever you can actually sell him for. What I'm saying is that, as far as FFP and accounting for his transfer, are considered, most of whatever we can sell him for will actually equate to a bookable profit. We bought him for £27m, on a 4.5 year deal, in January 2011, which from an accountancy point of view means he "costs" us £6m per year (£27m divided by 4.5 years). In August 2014 he signed a new deal, until 2018. This means we'd already "accounted" for £21m of his fee by that point (£6m per year x 3.5 years) so we only needed to account for a further £6m. This £6m will now be spread over the remaining years of his new contract, so that's £1.5m per year cost in the accounts. It's now summer 2015, so we've accounted for £1.5m, that means Dzeko's book value to us is now £4.5m. If we were, for arguments sake, to sell Dzeko for £14.5m in the next month or so then we'd be able to book a sell on value/profit/whatever you want to call it in the accounts of £10m for Dzeko. This can be booked all at once, in this years accounts. It doesn't need to be spread over the length of his remaining contract.
It's what your average, ill-informed, supporter (normally of one of the elite clubs, like United) doesn't understand about how transfer work, from an accountancy perspective. They see a club spending £30m on a player this year, and think it's cost us £30m in this years accounts. Equally, they look at buying a player for £30m (on a 5 year contract), and selling him after 4 years for £10m as a £20m loss on the player, when from an accountancy perspective it's actually a £4m profit.
Thanks for explaining the details of contracts and fees so well. I now do know the reasons for all those new contracts that were done last season. Cheers