The Long Awaited Accounts....

[dave.woodhall]

How about a player that's bought on a free? Do they have any value in the accounts?

I think they get assessed at market value. We got £1 million insurance for Luc Nilis although he was signed on a free.

[Sexual Ealing]

Surely (and I write in total blind ignorance) the readjustment in tangible assets is explained by the figure Lerner thought he'd get for the club if he sold it Vs the amount Dr X actually paid?

[CT Villan]

How about a player that's bought on a free? Do they have any value in the accounts?

I would think that at the very least their contract would have a value, not to mention signing on fees, agents fees, etc. For example even if they cost nought, we may be paying them 2 million upfront plus 6 million over a 4 year contract, ie. 8 million minimum.

[Mister E]

Surely (and I write in total blind ignorance) the readjustment in tangible assets is explained by the figure Lerner thought he'd get for the club if he sold it Vs the amount Dr X actually paid?

No, don't think so. The tangible assets have to be material (i.e. bricks and mortar).
My guess is that it is either a shift in accounting practice (so a question would be: have other clubs been forced to re-value their tangible assets?) or Dr Tony (i.e. his advisors) has deemed it useful to reduce the overall value of the club's assets. Don't know why he would want to do it other than to be able to show a growth in asset value in the future.

[Sexual Ealing]

Surely (and I write in total blind ignorance) the readjustment in tangible assets is explained by the figure Lerner thought he'd get for the club if he sold it Vs the amount Dr X actually paid?

No, don't think so. The tangible assets have to be material (i.e. bricks and mortar).
My guess is that it is either a shift in accounting practice (so a question would be: have other clubs been forced to re-value their tangible assets?) or Dr Tony (i.e. his advisors) has deemed it useful to reduce the overall value of the club's assets. Don't know why he would want to do it other than to be able to show a growth in asset value in the future.

But if the bricks & mortar assets were valued at £X, but then Xia ended up buying them for £Y, which was £Z less than £X, then those things would have to be revalued, no?

As I said, I have no idea but it seems to follow some sort of logic.

[Risso]

How about a player that's bought on a free? Do they have any value in the accounts?

I think they get assessed at market value. We got £1 million insurance for Luc Nilis although he was signed on a free.

Sorry, that's not right.  If you sign a player on a free, then the value on the balance sheet is £nil.  Same with kids that come through the academy.  Whatever you get in insurance has nothing to do with their value in the accounts.

[CT Villan]

Sorry, that's not right.  If you sign a player on a free, then the value on the balance sheet is £nil.  Same with kids that come through the academy.  Whatever you get in insurance has nothing to do with their value in the accounts.

So what would be asset on the balance sheet to offset the player's liabilities, ie. contract, signing-on fee, etc

[AlexAlexCropley]

Surely (and I write in total blind ignorance) the readjustment in tangible assets is explained by the figure Lerner thought he'd get for the club if he sold it Vs the amount Dr X actually paid?

No, don't think so. The tangible assets have to be material (i.e. bricks and mortar).
My guess is that it is either a shift in accounting practice (so a question would be: have other clubs been forced to re-value their tangible assets?) or Dr Tony (i.e. his advisors) has deemed it useful to reduce the overall value of the club's assets. Don't know why he would want to do it other than to be able to show a growth in asset value in the future.

But if the bricks & mortar assets were valued at £X, but then Xia ended up buying them for £Y, which was £Z less than £X, then those things would have to be revalued, no?

As I said, I have no idea but it seems to follow some sort of logic.

Numberwang!

[Sexual Ealing]

Surely (and I write in total blind ignorance) the readjustment in tangible assets is explained by the figure Lerner thought he'd get for the club if he sold it Vs the amount Dr X actually paid?

No, don't think so. The tangible assets have to be material (i.e. bricks and mortar).
My guess is that it is either a shift in accounting practice (so a question would be: have other clubs been forced to re-value their tangible assets?) or Dr Tony (i.e. his advisors) has deemed it useful to reduce the overall value of the club's assets. Don't know why he would want to do it other than to be able to show a growth in asset value in the future.

But if the bricks & mortar assets were valued at £X, but then Xia ended up buying them for £Y, which was £Z less than £X, then those things would have to be revalued, no?

As I said, I have no idea but it seems to follow some sort of logic.

Numberwang!

Ha!

Risso, am I to assume that your silence on this issue means I'm 100% correct and you're now scraping the bottom of the warchest to make a big money move and take me to the IOM?

Thought so. I'm flattered but I have a great relationship with the fans here in W13.

[Risso]

Sorry, that's not right.  If you sign a player on a free, then the value on the balance sheet is £nil.  Same with kids that come through the academy.  Whatever you get in insurance has nothing to do with their value in the accounts.

So what would be asset on the balance sheet to offset the player's liabilities, ie. contract, signing-on fee, etc

Nothing.  Signing on fees are a P&L expense.

[Risso]

*Winds down Range Rover driver's window*

I've always liked Sexy Ealin', been tryin to do summink there, but fink e's on a bit too much to be honest wiv yer.

[Sexual Ealing]

I'm unsettled and not in the right frame of mind to go to work tomorrow.

[Ad@m]

Sorry, that's not right.  If you sign a player on a free, then the value on the balance sheet is £nil.  Same with kids that come through the academy.  Whatever you get in insurance has nothing to do with their value in the accounts.

So what would be asset on the balance sheet to offset the player's liabilities, ie. contract, signing-on fee, etc

Nothing.  Signing on fees are a P&L expense.

Not so.

Per the 2015 accounts 'the costs associated with the acquisition of players' registrations are capitalised as an intangible fixed asset at the date of acquisition'.  Whilst it's not explicit I think it's safe to say this would include all incremental costs associated with the acquisition of player registrations, including signing on fees.

[Ad@m]

How about a player that's bought on a free? Do they have any value in the accounts?

I think they get assessed at market value. We got £1 million insurance for Luc Nilis although he was signed on a free.

To answer this and similar questions you need to get a bit technical.

From an accounting perspective it's not actually the player that's being valued.  It's not even the contract.  It's all driven by the accruals or "matching" concept, ie that for a set of accounts to make sense you need to show the expenses associated with the income generated in a particular year.

The logic on football players is that in signing a contract with a player you earn the right to generate income through their involvement in the club.  So if they sign a four year contract you can theoretically earn four years worth of income from them.  So any costs associated with signing that contract (eg the transfer fee, signing on fees, legal fees, etc) should be spread over the time the club is generating income.  It's therefore all about spreading the cost.  It's nothing about valuation.

So if we buy a player on a free or someone comes through the academy, there's little if any cost.  So there's nothing to spread.  Hence nothing in intangible assets.

[Ad@m]

Surely (and I write in total blind ignorance) the readjustment in tangible assets is explained by the figure Lerner thought he'd get for the club if he sold it Vs the amount Dr X actually paid?

No, don't think so. The tangible assets have to be material (i.e. bricks and mortar).
My guess is that it is either a shift in accounting practice (so a question would be: have other clubs been forced to re-value their tangible assets?) or Dr Tony (i.e. his advisors) has deemed it useful to reduce the overall value of the club's assets. Don't know why he would want to do it other than to be able to show a growth in asset value in the future.

But if the bricks & mortar assets were valued at £X, but then Xia ended up buying them for £Y, which was £Z less than £X, then those things would have to be revalued, no?

As I said, I have no idea but it seems to follow some sort of logic.

You're basically right.

To get a bit techie again, the sale of the club to Dr Tone is a 'post balance sheet event' and can only affect the numbers drawn up to 31 May if what happened two weeks afterwards shows that the values in the books were overstated at the 31 May.  To say it another way you need to show that it's not something that happened in those two weeks in between that caused the reduction in value shown by the sale price.

Given the season had finished and I'm not aware Bodymoor Heath was blown away (physical damage is a pretty good indicator of impairment!) then you start to run out of reasons for why the assets weren't overvalued.  But until we see the accounts we're guessing.