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Why do I get the feeling even such reasonable expectations will end up still being an impossible dream.
really
then we should have sold Bale for 2 million?
Amortisation isn't a given - its a method of "adjusting" the book keeping.
Player value fits as an intangible, eligible for amortisation
But player value goes up as well as down
So Greaves - no, you're understanding is off the boil - you were a lot closer before you tried to justify yourself..............
Just noticed that auto correct ruined my Arse pun!
No, no, Mick it's your understanding that's off the boil. First you misunderstand what I'm saying, then you compound the error by getting it wrong again.really
then we should have sold Bale for 2 million?
Amortisation isn't a given - its a method of "adjusting" the book keeping.
Player value fits as an intangible, eligible for amortisation
But player value goes up as well as down
So Greaves - no, you're understanding is off the boil - you were a lot closer before you tried to justify yourself..............
I remain happy with my amortisation explanation and the main point I made stays valid, that we will be facing heavy amortisation costs, and that will be a key reason, given that we won't be making any superstar sales this financial year, as to why our profits won't be anything like what they were last financial year.
Oh and I still await Ran's explanation as to why 'amortisation is bollocks'
You can write down asset values however you like as long as you're consistent
It should be in the notes to the accounts anyway, if anyone has them
It should be in the notes to the accounts anyway, if anyone has them
rightoNo, no, Mick it's your understanding that's off the boil. First you misunderstand what I'm saying, then you compound the error by getting it wrong again.
I remain happy with my amortisation explanation and the main point I made stays valid, that we will be facing heavy amortisation costs, and that will be a key reason, given that we won't be making any superstar sales this financial year, as to why our profits won't be anything like what they were last financial year.
Oh and I still await Ran's explanation as to why 'amortisation is bollocks'
facing heavy amortisation costs.......... that makes loads of sense.
Have a nice day
Uhm, it might be that I haven't slept in weeks, but we're talking about amortisation in terms of writing down assets; it's on the balance sheet, nothing to do with the P&L?
Writing down assets reduces your net worth, not your profit
Writing down assets reduces your net worth, not your profit
In other words I agree with Greaves' assertion that amortisation of our players (expressed as club assets) exists and the players' worth would be written down somehow, but I also agree with Mick that there is no "Amortisation Expense" that somehow reduces our profits.
Don't write them down them...use a typewriter or something...
Clubs don't pay for transfers in lump sums generally, payments are staggered over time. They also generally amortize the total transfer fee over the life of the players contract. I don't think there is a rule that the two must match exactly. So, while the amortization of assets (the players) is an item on the balance sheet, it does not necessarily have an exact effect on the funds available for future transfer dealings.
We also know that a % of revenue will be ring-fenced at the club for transfer dealings. We don't know what that % is.
We also know that a % of revenue will be ring-fenced at the club for transfer dealings. We don't know what that % is.
Actually thinking about it depreciation goes in as a cost doesn't it, so it would reduce your profits.
I would expect an accountant to view a player purchase as a cost over the term of contract, so:
- Purchase player for £50m on a 5 year contract
- Amortise at £10m per year, listed as a business expense on the P&L
- Sell after 3 years for £25m
You'd count that as a £5m profit on the sale (as the player is "worth" £50m less £30m amortised over the three years = £20m).
I would expect an accountant to view a player purchase as a cost over the term of contract, so:
- Purchase player for £50m on a 5 year contract
- Amortise at £10m per year, listed as a business expense on the P&L
- Sell after 3 years for £25m
You'd count that as a £5m profit on the sale (as the player is "worth" £50m less £30m amortised over the three years = £20m).
Bingo you got it!!
The accounting treatment is to credit balance sheet intangible assets, debit amortization expense. Basically as you reduce the intangibles (players) you take the expense as you say over the contract terms as it goes. So although as you say you may have in book terms made 5million, you havent really as has cost you 30 to hold him, plus the bloody wages!
And that is from an actual qualified accountant
Note to self...never get a beer with an accountant.
aulinhobored:
aulinhobored:Note to self...never get a beer with an accountant.
Haha! Don't worry I am not a practicing one!
I have been banging this drum on here for years only to be met by
"Oh yeah, let's do a Leeds shall we?"
Just shows how we have underspent solidly for years.
We will never succeed with Levy strengthening the balance sheet for the end game
"Oh yeah, let's do a Leeds shall we?"
Just shows how we have underspent solidly for years.
We will never succeed with Levy strengthening the balance sheet for the end game
I've been off air for a while, but love all the spurs financial reviews.
Well done Nick, now we are getting in the swing of financial things.
It was also intereesting in our latest financials that given the large profit we made on Bale that Levy took the opportunity to put in a further writedown on player intangible assets of £11mill. They did not mention in accs who, but would be guessing Paulinho, Soldado as likely given not hitting expected targets (eg goals, appearances - club & country, no CL qualification).
And yes confirm Greavisie obsersavation that player amortisation will be higher in 2014/15 because of the asset val (magnificent 7) being amortised over the life of their contracts.
Yep Shawry those costs are liable to be with us for a while, plus of course the costs of last summer, and whoever is left of previous relevant seasons, such as Lloris and Eriksen.
Still it's rather irrelevant isn't it, to the actual health of the club. It doesn't relate to actual cash flow or spending power.
What do our debtors/creditors look like?
What do our debtors/creditors look like?