03 Sep 2015 12:56:33
Hi Ed002
................
{Ed002's Note - I am not going to get in to that. I have no idea whay you are trying to understand this. You are digging a hole for ourself as it is also nothing whatsoever to do with FFP.}
03 Sep 2015 13:12:25
But why not try to understand it?
{Ed002's Note - Typically it causes too much confusion - certainly if you are asking questions like you just asked. And you cannot equate the annual accounts to FFP.}
03 Sep 2015 13:22:08
I get what you're saying, but the whole point of me trying to understand it is so I'm no longer confused :) I just started an accounting degree so I naturally take an interest in this stuff for certain reasons.
I know it's little to do with FFP, but FFP wasn't something I was concerned with for this question.
{Ed002's Note - I am going to do a podcast on FFP, transfer fees, why unicorns became extinct etc.. Then it might be a bit clearer. If you are simply looking at the profit and loss summary accounts they won't help you at all I am afraid.}
03 Sep 2015 13:43:55
Alright, sweet, the podcast will be awesome.
I do have a decent understanding of FFP though, you made a post about it some time ago and I read all of that.
I guess the crux of my confusion is why transfer income is recorded as income in FFP calculations, but not included in the turnover calculations for P/L summary account. i.e. we recorded a 255.6 turnover last year; 50.9m of that was match day, 100.9m was broadcasting and 103.8 was commercial. I'm trying to work out where all that Suarez money has gone in the P/L. Anyway, I don't really expect you to answer that.
Thanks ed
{Ed002's Note - It is not part of the revenue stream it is a cost to the club and therefore will come listed under Assets, probably under a sub-heading (of "Playing Staff - "Intangible Assets" or similar) and it will then be listed as something like:
Cost (1) (the value of the squad at the start of the period)
Additions (the value of the purchases)
Disposals (the value of the purchases)
Cost (2) (the value of the squad at the end of the period)
The difference between the two ((Cost (2))-(Cost (1)) is the figure that appears in the accounts - but it is not part of the revenue stream.}
03 Sep 2015 14:14:36
Right, I think I get that.
Thanks very much.
03 Sep 2015 16:18:35
Hi Ed002,
Just one point of clarification. I understand the additions and disposals, at the prices paid/received.
However, is the opening cost (Cost (1)) revalued year on year or is it just based on historical purchase cost? In which case, is a player from the academy based at £0, as Carra and Stevie would have been for us?
Really interesting, thanks!
{Ed002's Note - It is the book value of the players, so it is the value from the end of the previous season. These are simply intangible assets, no more.}
03 Sep 2015 16:43:09
Cool, thanks Ed002.
Does each club revalue their intangible assets themselves or is there a set formula (i.e. writing down the value over the length of the contract, for example?)
Ta
Z
{Ed002's Note - You have misunderstood.}
03 Sep 2015 17:10:31
OK, always a chance of that!
In which case, could I ask how the book value of the players is calculated? Not trying to be an arse, but really interested in this area!
Thanks
Z
04 Sep 2015 00:32:53
That's why there is player amortisation. Liverpool lost something like 40 million pounds in player amortisation last year.