Once again, accounting standards define who is a "related party" and how these must be reported and FFP just regurgitates that word-for-word. We've not declared Etihad as a related party and UEFA has no say in the matter.Shaelumstash said:Commercially the Nike and Etihad deals should help with that, but I still have a feeling Etihad will be treated as a related party and the value of the deal will questioned by UEFA.
Prestwich_Blue said:There's no linkage between how we finance a player purchase and how we show it in the accounts. Standard accounting practice requires an asset to be written off over its useful life. If we sign a player on a 5 year contract then we charge 1/5th of the fee to the P&L account as amortisation every year, even if we paid the lot up-front. If we renegotiate his contract after three years, then the remaining book value (what he cost less cumulative amortisation charged to date) is re-apportioned over the life of the new contract. So we can be charging amortisation long after we've finished paying for a player.grunge said:Does anyone have a link to how much teams will get with the new TV deal?
-- Thu Jun 14, 2012 11:51 am --
bluemoondays said:Doesn't work that way - their costs are spread over the duration of their contract. For example, Aguero was £38m over 5 years so he'd appear in the books as costing circa £7.5m/year.
Isn't that only if we choose to pay in instalments? I thought we were paying everything up front with only the salary spread out?
There are some circumstances where clubs that don't follow that practice & write off the full amount in the first year and FFP allows for this. But you can't pick and choose how you do it and UK accounting standards require the former to be followed in most cases. A lot of FFP is simply re-stating existing accounting standards, which many people don't realise.
There was a £29m charge to the accounts in 2010/11 to cover 'impairment', which is basically where we felt that players had a financial book value but their value in the books was well in excess of what we could actually get (e.g. Bellamy & Jo). That's quite unusual and was a quite legitimate way of moving a potential loss in future accounts that did count towards FFP into these accounts, which didn't.
That's that sorted thenJ-Bay Blue said:Prestwich_Blue said:There's no linkage between how we finance a player purchase and how we show it in the accounts. Standard accounting practice requires an asset to be written off over its useful life. If we sign a player on a 5 year contract then we charge 1/5th of the fee to the P&L account as amortisation every year, even if we paid the lot up-front. If we renegotiate his contract after three years, then the remaining book value (what he cost less cumulative amortisation charged to date) is re-apportioned over the life of the new contract. So we can be charging amortisation long after we've finished paying for a player.grunge said:Does anyone have a link to how much teams will get with the new TV deal?
-- Thu Jun 14, 2012 11:51 am --
Isn't that only if we choose to pay in instalments? I thought we were paying everything up front with only the salary spread out?
There are some circumstances where clubs that don't follow that practice & write off the full amount in the first year and FFP allows for this. But you can't pick and choose how you do it and UK accounting standards require the former to be followed in most cases. A lot of FFP is simply re-stating existing accounting standards, which many people don't realise.
There was a £29m charge to the accounts in 2010/11 to cover 'impairment', which is basically where we felt that players had a financial book value but their value in the books was well in excess of what we could actually get (e.g. Bellamy & Jo). That's quite unusual and was a quite legitimate way of moving a potential loss in future accounts that did count towards FFP into these accounts, which didn't.
St Helens Blue
In the unlikely event that this is still not clear to you, let me give you the short version: Cash flow and Income are not the same thing!
In other words, even though you pay cash for an asset in year 1, the effect on profitability as shown in the income statement (profit and loss account) can be spead over a number of years, depending on the type of asset, and the prevailing income tax laws pertaining to depreciation and amortisation.
J-Bay Blue said:Prestwich_Blue said:There's no linkage between how we finance a player purchase and how we show it in the accounts. Standard accounting practice requires an asset to be written off over its useful life. If we sign a player on a 5 year contract then we charge 1/5th of the fee to the P&L account as amortisation every year, even if we paid the lot up-front. If we renegotiate his contract after three years, then the remaining book value (what he cost less cumulative amortisation charged to date) is re-apportioned over the life of the new contract. So we can be charging amortisation long after we've finished paying for a player.grunge said:Does anyone have a link to how much teams will get with the new TV deal?
-- Thu Jun 14, 2012 11:51 am --
Isn't that only if we choose to pay in instalments? I thought we were paying everything up front with only the salary spread out?
There are some circumstances where clubs that don't follow that practice & write off the full amount in the first year and FFP allows for this. But you can't pick and choose how you do it and UK accounting standards require the former to be followed in most cases. A lot of FFP is simply re-stating existing accounting standards, which many people don't realise.
There was a £29m charge to the accounts in 2010/11 to cover 'impairment', which is basically where we felt that players had a financial book value but their value in the books was well in excess of what we could actually get (e.g. Bellamy & Jo). That's quite unusual and was a quite legitimate way of moving a potential loss in future accounts that did count towards FFP into these accounts, which didn't.
St Helens Blue
In the unlikely event that this is still not clear to you, let me give you the short version: Cash flow and Income are not the same thing!
In other words, even though you pay cash for an asset in year 1, the effect on profitability as shown in the income statement (profit and loss account) can be spead over a number of years, depending on the type of asset, and the prevailing income tax laws pertaining to depreciation and amortisation.
Prestwich_Blue said:Once again, accounting standards define who is a "related party" and how these must be reported and FFP just regurgitates that word-for-word. We've not declared Etihad as a related party and UEFA has no say in the matter.Shaelumstash said:Commercially the Nike and Etihad deals should help with that, but I still have a feeling Etihad will be treated as a related party and the value of the deal will questioned by UEFA.
jackrussel said:well pleased we did,nt spend 100 million on kaka that would have been the worst transfer ever,bar none