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Well after a bit of youtube scouting I think Brighton have discovered another gem.......young and raw but there is potential there. Bit like our own Mousa Dembele imo

 
Apparently there is one (and to be fair for £35m he would be an excellent signing for many teams)



Aaron Paul He Cant Keep Getting Away With This GIF by Breaking Bad
 

So here’s the bit I don’t understand (not an accountant in any way shape or form).

If you can ‘amortise’ (if that’s a verb) the value of a contract for any given year, and essentially divide your expenditure by the length of the contract, why do you also get to benefit from the full value of a sale immediately?

So, you have 100 million pound player on a ten year contract and can say ‘I’ve only spent 10 million this year’. Fine.

But for Havertz by way of example, they’re claiming the full value of his sale immediately to the tune of 65 million. Shouldn’t the same principle apply; they only get the annual value of that sale, being whatever Woolwich give them this calendar year?
 
So here’s the bit I don’t understand (not an accountant in any way shape or form).

If you can ‘amortise’ (if that’s a verb) the value of a contract for any given year, and essentially divide your expenditure by the length of the contract, why do you also get to benefit from the full value of a sale immediately?

So, you have 100 million pound player on a ten year contract and can say ‘I’ve only spent 10 million this year’. Fine.

But for Havertz by way of example, they’re claiming the full value of his sale immediately to the tune of 65 million. Shouldn’t the same principle apply; they only get the annual value of that sale, being whatever Woolwich give them this calendar year?
You amortise the cost of an asset over it's lifetime. When they get rid of an asset (havertz) they don't have it anymore the value is realised. If he has 30m amortized left it's fee minus amortized 65m-30m=35m is added to the books.

It's why selling kids /free transfers is good for your ffp as the fee all revenue no need to take amortized cost off.

Chelsea are banking on ffp going away or Saudis always buying their players otherwise they are kicking the issues on a few years only
 
So here’s the bit I don’t understand (not an accountant in any way shape or form).

If you can ‘amortise’ (if that’s a verb) the value of a contract for any given year, and essentially divide your expenditure by the length of the contract, why do you also get to benefit from the full value of a sale immediately?

So, you have 100 million pound player on a ten year contract and can say ‘I’ve only spent 10 million this year’. Fine.

But for Havertz by way of example, they’re claiming the full value of his sale immediately to the tune of 65 million. Shouldn’t the same principle apply; they only get the annual value of that sale, being whatever Woolwich give them this calendar year?

They're not quite taking the full amount Havertz. They did on Mount though, because he was academy, and had a value of zero on their balance sheet.

Basically you/they can only benefit from the amount not "amortised away" yet. In your example, 100m over 10 years. If they sell said player again after 1 year for 100m, they have amortised 10m, and are now selling a 90m asset (as far as, in their books) for 100m, so their benefit is 10m. Sell him for 100m after five years they benefit 50m, because they've amortised the other 50m.
 
You amortise the cost of an asset over it's lifetime. When they get rid of an asset (havertz) they don't have it anymore the value is realised. If he has 30m amortized left it's fee minus amortized 65m-30m=35m is added to the books.

It's why selling kids /free transfers is good for your ffp as the fee all revenue no need to take amortized cost off.

Chelsea are banking on ffp going away or Saudis always buying their players otherwise they are kicking the issues on a few years only
Understood.

The value is realised, but the liquid cash is not received. I suppose it’s the difference between a pure accounting snap shot and the reality of how much capital you have at your disposal.

If FFP is notionally there to help stave off administration, it’s a pretty reckless way of approaching things.
 
Understood.

The value is realised, but the liquid cash is not received. I suppose it’s the difference between a pure accounting snap shot and the reality of how much capital you have at your disposal.

If FFP is notionally there to help stave off administration, it’s a pretty reckless way of approaching things.
It's based off of accountancy rules for normal businesses. Spain have their own that looks more at affordability and is near real time rather than based upon yearly accounts /3 years.
 
It's based off of accountancy rules for normal businesses. Spain have their own that looks more at affordability and is near real time rather than based upon yearly accounts /3 years.
It’s intriguing.

In any regulated financial activity, you would have to pledge collateral to offset your exposure. Whether that be a central bank or commercial scheme. That said, presumably that must be part of the fit and proper ownership test. Clearlake have 70 billion under asset.
 
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