Villa latest accounts

[snowychap]

I really don't know what you don't understand? You realise a player can be considered an asset, and therefore when sold for nothing be it Ireland/Dunne whoever it can therefore be considered a loss on accounts as in the original transfer fee paid.

Players' registrations are capitalized when they are acquired (not just their transfer fee but, I believe, also any agent and signing on fees) and they are then expensed over the duration of their contract (amortization in football circles).

The difference between the book value of the player (that's the original capitalized amount and the amortization taken account of) and the transfer fee received is what is considered as part of the trading of players’ registrations (whether as a profit or a loss) upon the disposal of the player's registration.

Accruals principle, surely? Revenue v expenses during the same periods.

Having reread your last post, I think you were halfway there without quite getting it but looking at the other comment about Bent - it would only show as an £18m loss if one were to purchase his registration for £18m in one year and get rid of him in the same year (without any depreciation having occurred).

[suttonpaul]

Wow this is lost on you.

 

Ok 7.8 goes out in actual cash the year he is brought however an asset of 7.8 goes on the balance sheet (it assumes what you have brought is worth that amount)

 

Then when said player is sold for nothing a 7.8m goes off the balance sheet as being lost as the asset is sold for nothing.

 

If that still doesn't make sense call it a business property that is brought for 7.8 and then given away for nothing 4 years later.

 

Does that make sense to you now?

[villabromsgrove]

Creative accounting is a thing of beauty. 

Edited March 1, 2014 by villabromsgrove

[snowychap]

Wow this is lost on you.

Is it? Let's give it a go.

Ok 7.8 goes out in actual cash the year he is brought however an asset of 7.8 goes on the balance sheet (it assumes what you have brought is worth that amount)

Yep, that will be what happens when you buy something and it is capitalized.

Your '7.8' goes out (in the cash flow - that's assuming it isn't paid in installments) and the asset (the player's registration) is capitalized as '7.8' (we're going to be easy and assume nothing else is involved).

Then when said player is sold for nothing a 7.8m goes off the balance sheet as being lost as the asset is sold for nothing.

That would happen if the player were sold for nothing in the same financial year in which he was bought (i.e. when his book value was still the '7.8' that it was when his registration was acquired and capitalized).

What happens otherwise is that the capitalized values of the player's registration (that's the '7.8') is written down over the length of his contract (however many years it is, let's say 4) which would mean the book value of his registration reduces by '1.95' per year and thus if he were sold for '0' after two years, the loss (that would be the loss on trading of player registrations - as per the article, the accounts and so on) would be '3.9'; after 3 years, '1.95' and so on. If, however, his registration were sold for £25m after two years then the 'profit on disposal' would be £21.1m.

Get it now?

Edit: The really important thing is that you understand that 'when said player is sold for nothing a 7.8m goes off the balance sheet as being lost as the asset is sold for nothing' is wrong.

Edited March 1, 2014 by snowychap

[Kwan]

In this thread

The destruction of basic maths

Edited March 1, 2014 by Kwan

[suttonpaul]

No I obviously don't.

 

Id love to see how we lose 50m if it is just day to day operations and not depreciation of assets.

[tarjei]

Snowychap is correct as far as I know. The value of a player in the books is all expenses in aquiring that player divided by duration of contract, so each year an amount is written off.

The fact that this number is so high is because players like Ireland & Bent are coming towards the end of their contracts. Whereas the players we have aquired over the last few seasons have very little value in the books.

It's not an actual loss of money though. In other words actual expenses seems to be missing from that report, as it's inflated by assets being written off. 

Edited March 1, 2014 by tarjei

[heid3ster]

Yay, we're losing slightly less money now.

[thetrees]

Wow this is lost on you.

 

Ok 7.8 goes out in actual cash the year he is brought however an asset of 7.8 goes on the balance sheet (it assumes what you have brought is worth that amount)

 

Then when said player is sold for nothing a 7.8m goes off the balance sheet as being lost as the asset is sold for nothing.

 

If that still doesn't make sense call it a business property that is brought for 7.8 and then given away for nothing 4 years later.

 

Does that make sense to you now?

Snowy's explanation makes far more sense than this. It is only the same as depreciating a capital asset in any company, such as a car. The only difference is that after 3 years a company's cars are worth something!

[briny_ear]

Essentially we seem to have a press release which says: "Good news! We made another hefty loss in 2012/3 but next year things will be different (honest)."

And no actual accounts yet.

[Dodgyknees]

Essentially we seem to have a press release which says: "Good news! We made another hefty loss in 2012/3 but next year things will be different (honest)."

And no actual accounts yet.

All part of the rinse and repeat "we will be OK next year" theme. It will keep on like this till fans say no more. Otherwise, it will be a continuous long term plan with no end, constant cuts and the phrase.. "We know where we want to be". Edited March 1, 2014 by dodgyknees

[thetrees]

Essentially we seem to have a press release which says: "Good news! We made another hefty loss in 2012/3 but next year things will be different (honest)."

And no actual accounts yet.

Filing date was yesterday, so the actual accounts will show up on CH and through the various credit checking agency channels during the coming week.

[Brumstopdogs]

A clear positive is our operating loss (profit/loss before tax and interest) improved although the loss after interest and tax didn't.

 

It sounds like in the previous set of accounts Lerner had waived a huge interest payment but in the financial year 12/13 he didn't which if your comparing like with like the loss after tax for financial year 12/13 would have been about £14m worse if he hadn't done such a big £20m waiver of interest in that year)

 

No doubt the accounts for financial year 13/14 will be even more favourable but I'd rather we had a decent team than a decent balance sheet!

[Foxy1]

I can only think it is that accountancy bollocks of you brought an asset (player) from 10m and sold him for nothing therefore you lost 10m.

 

We all know that isn't a real loss of course as it was already paid for.

MON? is that you??

[Brumstopdogs]

 

I can only think it is that accountancy bollocks of you brought an asset (player) from 10m and sold him for nothing therefore you lost 10m.

 

We all know that isn't a real loss of course as it was already paid for.

MON? is that you??

 

Paid £10m and sold for £0m - sounds like a loss of £10m to me!

[briny_ear]

Sod the football, I love a thread that grapples with the nitty gritty of amortization!

[Brumstopdogs]

Sod the football, I love a thread that grapples with the nitty gritty of amortization!

As assets normally get amortised across their useful life I guess most of our signings are fully amortised on day one!

Edited March 1, 2014 by Brumstopdogs

[Electric Avenue]

Can we cut out the I'm a better accountant than you shenanigans ;-)

[shaggy]

If you look at the economy figures can be what you want them to be if you have a good accountant and spin doctor. I really wouldn't want to believe anything coming out of the club at the moment under the present owner.

[NurembergVillan]

If this is how they look with positive spin I'd say we're knackered.