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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.
heh, but will that mean the 5m we got would be swallowed up by the 7m loss as chicago lion claims under fpp? -
An argument about accounting practices is a new nadir to which this once great club has sunk.
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An argument about accounting practices is a new nadir to which this once great club has sunk.
This is our transfer budget (or not) we're talking about, so pay attention Richard
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An argument about accounting practices is a new nadir to which this once great club has sunk.
This is our transfer budget (or not) we're talking about, so pay attention Richard
If I'd wanted to be an accountant I wouldn't have tried so hard at my A Levels! -
I started out aiming for A levels but i amortised downwards through my 5 years at school
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An argument about accounting practices is a new nadir to which this once great club has sunk.
This is our transfer budget (or not) we're talking about, so pay attention Richard
If I'd wanted to be an accountant I wouldn't have tried so hard at my A Levels!
The law bit was the easiest part of my accounting qualification!
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The difference between a lawyer and an accountant is that an accountant knows he/she is boring...
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An argument about accounting practices is a new nadir to which this once great club has sunk.
Nah, it's all old hat.
Villadawg. There's a name from the past (thankfully). -
well come on Risso. If we sell Hogan for 5m does that show as 5m clawed back in the bank this period OR as ChicagoLion claims a 7m loss that will further damage our FPP standings?
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well come on Risso. If we sell Hogan for 5m does that show as 5m clawed back in the bank this period OR as ChicagoLion claims a 7m loss that will further damage our FPP standings?
It's a loss for FFP purposes. However, it would of course reduce the wage bill for subsequent years. And get rid of a deeply dismal player. There are some thing in life that money simply cannot buy. -
well come on Risso. If we sell Hogan for 5m does that show as 5m clawed back in the bank this period OR as ChicagoLion claims a 7m loss that will further damage our FPP standings?
It's a loss for FFP purposes. However, it would of course reduce the wage bill for subsequent years. And get rid of a deeply dismal player. There are some thing in life that money simply cannot buy.
so, basically anyone worth less than their amorted(is that even a word?) value is not worth selling? -
Amortised
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Amortised. I suppose it depends on the situation the club is in at a particular moment in time. Yes we'd take a hit on Hogan all in one go if we sold him in January, but the amortisation would be the same in total over the remainder of his contract if he stayed put and left for nothing, and of course we'd be paying his wages all that time.
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well either spelling we're fucked. someone like elphick we have to get 1.5m to make it worth our while to sell him under fpp and that's just to break even. swapsies seems the only way to go
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Wait.. so clubs that are in trouble because of FFP cant sell their players to get out of trouble with FFP?
What sort of chance does that give us then?