Bruce Sacked at last (now official)

[ChicagoLion]

Unfortunately, Taking a big loss on a player is exactly what FFP rules will not allow if you have allready accumulated the maximum of losses allowed.
This is not about Bruce being given leeway by the owner it is what is allowable under FFP,

Well the FFP is £13m loss a season or £39m over 3 seasons i think. I have no idea what we have lost in 3 seasons but  i can't see getting 6m back for Hogan making things worse.

If that means we write off 4 million it makes it 4 million worse.
Dont take up,accountancy.

Obviously not. I'm still struggling to work out how clawing back 6m and probably the same in wages, is worse than writing off 12m and the same in wages

Because players transfer fees are written off over the period of thier contract.
So if we spent 10 on Hogan and gave him a 5 year contract, his value on the books after 1 year would be 8 million. If we sold him for 4 million we would have to write off the balance of 4 million.
This would make our FFP position worse by 4 million.

well if we're heading down into the fantasy world of amortisation then you're correct. Both you and I know that in the real world the value of players doesn't always  decrease or rise depending on the length of their contract. If Hogan had scored 10 goals upto now and continued in that vein till the summer, we'd be looking at far over the 12m we paid. Likewise the fact that he can't hit a cow's arse with a banjo means his amortisation value this summer is already far over his real value. The reality is if we don't sell him soon it's likely we'll be writing off all of it, whether its now or in 5 years time.

Amortisation is  how player value is accounted for, you said you could not see see how selling Hogan at a loss would make any difference under FFP and I have tried to explain this to you.

You obviously have your own version of reality so I will leave it there.

[sickbeggar]

I get what your saying but amortisation only works with assets with a fixed depreciation like vehicles and equipment. With players contracts it is as best a guestimate and at worse wildly inaccurate and was only broughtin to football a few years back when they thought transfer fees were going to be done away with after Bosman. Take Sanchez at Arsenal. cost them 35m so with amortisation he's worth about 5-6m on the books in January. Now if arsenal decide to sell him, they are likely to get 20+m for him. Does that money magically disappear from the books because amortisation has already taken care of it?

[Mister E]

I get what your saying but amortisation only works with assets with a fixed depreciation like vehicles and equipment. With players contracts it is as best a guestimate and at worse wildly inaccurate and was only broughtin to football a few years back when they thought transfer fees were going to be done away with after Bosman. Take Sanchez at Arsenal. cost them 35m so with amortisation he's worth about 5-6m on the books in January. Now if arsenal decide to sell him, they are likely to get 20+m for him. Does that money magically disappear from the books because amortisation has already taken care of it?

Its not guesstimate. The contract-length determines the amortisation value. If you were sad enough, you could work out the exact intangible asset value by looking at purchase prices, contract lengths and time spent at the club.
I'd rather stick pins in my eyes, frankly.

[sickbeggar]

I get what your saying but amortisation only works with assets with a fixed depreciation like vehicles and equipment. With players contracts it is as best a guestimate and at worse wildly inaccurate and was only broughtin to football a few years back when they thought transfer fees were going to be done away with after Bosman. Take Sanchez at Arsenal. cost them 35m so with amortisation he's worth about 5-6m on the books in January. Now if arsenal decide to sell him, they are likely to get 20+m for him. Does that money magically disappear from the books because amortisation has already taken care of it?

Its not guesstimate. The contract-length determines the amortisation value.

yes but it's not the REAL value unless that players see's out his contract

[Malandro]

I fear that Risso has read this and and jumped from a multistorey carpark.

[Clampy]

I fear that Risso has read this and and jumped from a multistorey carpark.

That post is wrong on so many levels.

[Malandro]

I fear that Risso has read this and and jumped from a multistorey carpark.

That post is wrong on so many levels.

The old ones are the best Clampy!

[sickbeggar]

bottom line is amortisation is pie in the sky figures for player contracts.If i buy a car for 20 grand and ammortise the value over 5 years in my accounts then the value after 5 years is within a set parameter depending on the condition etc.. In 2 years time no-one is going to offer me 40 grand for my car however good condition it is in, and its unlikely i'm going to flog it for 2 grand in 12months because i don't like driving it

[Ad@m]

bottom line is amortisation is pie in the sky figures for player contracts.If i buy a car for 20 grand and ammortise the value over 5 years in my accounts then the value after 5 years is within a set parameter depending on the condition etc.. In 2 years time no-one is going to offer me 40 grand for my car however good condition it is in, and its unlikely i'm going to flog it for 2 grand in 12months because i don't like driving it

It really isn't.

I'd stop digging mate.

[sickbeggar]

bottom line is amortisation is pie in the sky figures for player contracts.If i buy a car for 20 grand and ammortise the value over 5 years in my accounts then the value after 5 years is within a set parameter depending on the condition etc.. In 2 years time no-one is going to offer me 40 grand for my car however good condition it is in, and its unlikely i'm going to flog it for 2 grand in 12months because i don't like driving it

It really isn't.

I'd stop digging mate.

eh? what you have got double the money you paid for your car after 3 years use? blimey....

[Villa75]

Are there any other current championship clubs hamstrung by FFP, as we seem to be?

Just wondering about the impact of the Jan transfer window.

[ChicagoLion]

bottom line is amortisation is pie in the sky figures for player contracts.If i buy a car for 20 grand and ammortise the value over 5 years in my accounts then the value after 5 years is within a set parameter depending on the condition etc.. In 2 years time no-one is going to offer me 40 grand for my car however good condition it is in, and its unlikely i'm going to flog it for 2 grand in 12months because i don't like driving it

It really isn't.

I'd stop digging mate.

Don’t worry, he is only visiting earth.

[Risso]

I get what your saying but amortisation only works with assets with a fixed depreciation like vehicles and equipment. With players contracts it is as best a guestimate and at worse wildly inaccurate and was only broughtin to football a few years back when they thought transfer fees were going to be done away with after Bosman. Take Sanchez at Arsenal. cost them 35m so with amortisation he's worth about 5-6m on the books in January. Now if arsenal decide to sell him, they are likely to get 20+m for him. Does that money magically disappear from the books because amortisation has already taken care of it?

Sweet baby Jesus and the orphans.

[sickbeggar]

I'm not arguing we're not using amortisation, just that it doesn't suit assets that have a fluctuating value, i.e. not necessarily decreasing over a set period. Perhaps you can confirm its not worth selling any player who's selling price is below their amortisation value?

[Risso]

I'm not arguing we're not using amortisation, just that it doesn't suit assets that have a fluctuating value, i.e. not necessarily decreasing over a set period. Perhaps you can confirm its not worth selling any player who's selling price is below their amortisation value?

Well, since you asked, amortisation is a strict rule where you write off the value of a player's contract over the length of the contract, as has been pointed out.  A £10m player on a five year contract leads to a £2m per year amortisation charge.  Their actual market value is irrelevant for this calculation.  The only time this comes into play is if you sell a player for more than than their amortised value, at which point you make a profit on disposal.

Taking Hogan as an example to illustrate your point, say he cost £12m on a 4 year contract.  That's £3m per year on amortisation, which means that his book value is now c. £9m.  If we sell him for £5m, the accounting treatment for this is that I am glad he's gone, because he's fucking shit.