duncanjwitham

8 minutes ago, RadioactiveWaste said:

Although one of the replies to Nixon suggsests ammended accounts can be submitted. I'm not an accountant so no idea on that one, but it would explain a few things.

I’ve been Googling for a few minutes to try and figure this out. There’s definitely a process for amending accounts at companies house, but it looks to me (not an expert etc…) like you can only do it if the company director believes the original accounts were non-compliant with the Companies Act, and then you probably need to get them re-audited, with statements from the auditors about the compliance issues being corrected.  Which is a bit of a problem is us and our auditors all believe the original accounts are fine.

Beyond that though, I don’t see why we need to resubmit at companies house. Just restate the P&S submissions for the EFL and then plug those numbers in, going forwards.  If they need more detail we can show them the working without it needed to be formally filed.

7 minutes ago, JuanFloEvraTheCocu'sNesta said:

We should absolutely not just roll over and accept a points deduction for two reasons. One, because we haven't so far been found to have done anything to warrant it and two, we can't just let the EFL arbitrarily make up punishments on the fly because they are under pressure from other clubs. Taking that kind of conduct to it's logical conclusion potentially leads to all sorts of nonsense not just for DCFC but for every club in the pyramid down the line.

Not to mention, one of the big reasons to just roll over and take it on the chin was so we could get clear of the embargo and get some players in. That's now largely a moot point, with the window being shut.  Obviously if we clear the embargo we can sign players who are currently on free transfers, but that's a pretty shallow pool to be dipping in.  I suspect the 'big prize' we wanted in transfer terms was a bunch of loan players from Man Utd etc, and that can't happen now.

I'm sure Mel also wants it cleared so he can try and push a sale through, but you'd have to wonder whether he's better off trying to sell a club now that has something like a 9-point deduction, or a club in a months time that maybe just has a £100k fine.

9 minutes ago, atherstoneram said:

Have you proof that all football related debts have been paid?

They've been removed from the EFL embargo tracker.

1 minute ago, Ghost of Clough said:

If it's a made up amortisation policy then I'll be very surprised if we fail any year.

 

Straight-line (with extensions), I estimate the following:

Fail: 2017 (£6m), 2020 (£6m), 21 (£2.5m)

Pass: 2018 (£0m), 2019 (£3.5m)

Is that including the stadium sale and the “extra £30m”?

3 minutes ago, Van der MoodHoover said:

Aaaahhh....some more pages of accounting policy and legal arguments to review..... ?

 

What kind of place do you think this is? If you want to talk about football, go here: https://www.accountantforums.com/

2 minutes ago, RadioactiveWaste said:

I suspect we've submitted accounts that we believe are compliant with FRS102 and the EFL are trying find a way to say they aren't.

I'm pretty convinced that's what's going on, or at the very least we've shown the EFL what we intended to submit and are (were) arguing over the details.

I half wonder if the 6 day extension was to allow us to get a sign-off from an independent auditor, as DC2 suggested we should have done originally.

4 minutes ago, Spanish said:

LAP asked for permission from EFL to refer it back the DC but perhaps that was a courtesy thing?

reading between the lines?

the decision of DC2 - we declare that the annual accounts....did not comply with the requirements of the P&S rules.....

Seems pretty clear to me at least.  I agree that they probably had little choice but there is no uncertainty over the decision at all

Going back over it, it does look like the LAP asked the EFL to refer it back. I assume the EFL allowed it for the reasons in the LAP report - there would be no right of appeal over the sanction if they didn't refer it back, and they wanted a shot at arguing their case for a stronger punishment.

From DC2:

To me that's pretty clear that they had no say over the actual decision, only the punishment for it.

In terms of reading between the lines, it's bits like this:

That DC2 clearly felt the need to include in their written report, for some reason...

25 minutes ago, Spanish said:

DC1

The fifth Particular of the Second Charge is proven on the basis that, following the change to the Club’s approach to amortisation of the capitalised costs of player registrations at the end of the financial year ended 30 June 2015, the Club’s annual financial statements for the years ended 30 June 2016, 30 June 2017 and 30 June 2018 failed to adequately disclose those changes to its accounting policies and/or estimates as required by section 10 of FRS 102.

the LAP found us guilty of the 2nd particular on appeal and referred it back to DC mostly because they thought Prof Pope's evidence should not have been dismissed so lightly. Also they were not the ones to insist on a restatement.

We do not have jurisdiction to order consequential disclosure for the purpose of the restatement of the accounts, which is again a matter for the DC.

DC2

they overturned their original decision and found that the 16/17/18 accounts did not comply with P&S rules and that we must restate them, so guilty of the second particular which they issued a small fine for, knowing that the restated accounts will either be ok or not.  Quite a sensible kick into the long grass really.  For some reason I can't copy the exact wording sorry.

 

The EFL's behavior at the end of the process to express disappointment in not being able to take further action against the club was crass stupidity and clearly shows them as the clowns they are.  I am still not sure why they allowed the LAP to hand this back the DC, it is almost like they are bipolar.  It has a feel of they say things for public consumption that they do not believe in really but who knows.  Most quango's and to that matter regulators are rarely adequate to meet expectations.  We are lucky that it went back to DC really

 

If we're being pedantic, DC2 didn't overturn their original decision, the LAP overturned it, and only handed it back to the DC to decide on the punishment.  It seems pretty clear to me (reading between the lines of the DC2 written reasons) they they disagree with the LAP and think the original decision should have stood, but they had no power to reverse the appeal.

It's not that the EFL gave the LAP the power to hand it back for this specific case, it's a power that's written into the EFL charter or rules or whatever and applies to all cases that go to appeal.  The reasons for the LAP handing it back are documented in their written reasons, and seemed fairly well reasoned from what I remember.

And once it's been established that our accounts were wrong (in legal terms anyway, I and probably many others still have doubts over that ruling), restating them is the obvious and logical response.  

1 hour ago, kevinhectoring said:

can’t understand how we can dump a load of information on the EFL and still be shown on their website as guilty on all counts. Surely accounts and P&S returns were delivered and if so why are those still up there? Maybe they are handling all 4 as a job lot 

I'm not sure any of those things listed on the EFL embargo page are specifically related to the accounts we need to restate. The HMRC one certainly isn't (not directly anyway), and I think the other 3 are all to do with the subsequent years (18/19 and 19/20). We have no idea if those have been submitted yet.

Half the problem is that we basically know nothing at all - nobody, the club, the EFL, anyone, is telling us anything. So there's a vacuum that is getting filled with rumours and made-up nonsense.  The suggestion doing the rounds last week was that the HMRC debt is just us using one of the COVID deferment schemes, like a bunch of other clubs have.  If it's the case that us (and only us) are getting punished for something a load of clubs have done then 'beastly' is absolutely right, but we just don't know because no one is telling us anything.  It could be that the other clubs have all cleared their deferred payments months ago, but we are still sitting on ours, we just don't know.  The same with the accounts restatement - we know we've submitted something, but we don't know what it was, or why, or even when we submitted it.

10 minutes ago, Ambitious said:

We wouldn't find out a point deduction now anyway, if we even get one, as the weight of the point deduction is based on how badly we breached P&S and seemingly is open to interpretation. I would imagine a -18 point deduction would need to be somewhere in the region of a £160-180m loss over the three years, so you can dismiss that as nonsense. 

Sheffield Wednesday got a -6 point deduction for a £66m loss over three years. We wouldn't even get anywhere near that. I believe Reading haven't received a point deduction for their breach as of yet. I'm still confident we won't be in any breach of P&S but ultimately we don't know exactly how our amortisation policy will shake out. A minor breach, at the very, very worst, so wouldn't be surprised to see us only pick up a -3 or a fine. 

The points deductions don't work like that.  It's something like a 1 point deduction per £1m of overspend up to a maximum of 12 points (although I think they might have slightly tweaked those figures recently).  Plus there's an additional (up to) 9 points that can be added on for other bad behaviour.  Sheffield Wednesday were given the full 12 points, and had it reduced to 6 on appeal (I assume for mitigating circumstances around the stadium sale).  We'd only need to overspend by ~£10m, plus the EFL try to force an additional 9 points to get an 18 point penalty.

3 minutes ago, Jubbs said:

They are only due with the EFL today, so don't expect them to be on Companies House soon

That's 2 different things, I think. I doubt very much the restated accounts will appear on Companies House - I'd be surprised if they even allow companies to restate accounts years after the fact.  They'll be submitted to the EFL, probably just as revised P&S statements, and we'll probably never see them.

The other overdue accounts (18/19 and 19/20 IIRC) don't have to be approved by the EFL or anything, they'll go straight to Companies House when we're ready to submit them.  The EFL will only get involved if they look like they'll be close to the FFP thresholds.

11 minutes ago, kevinhectoring said:

Didn’t explain it very well, sorry. The starting point for clubs’ accounts should be FRS. The EFl should then have detailed rules which require adjustments as the EFL (clubs) see fit, with the result that the P&S return does not come straight off the audited accounts. Their rules already do this to a certain extent eg with connected party contracts. But to get closer to a level playing field they need to expand the scope of their own rules to stop people using loopholes which are permitted by FRS (eg the one Mel has described )

That's basically what I said though.  It doesn't need to be a completely new accounting code written from scratch, but if they're writing a whole load of new rules on top of the existing ones, then everything I said still applies - they still need proper consultations to write those rules, to pay in-house auditors to sign off on clubs accounts, proper enforcement and the clubs to pay for it etc etc.  They either need to document and publish *exactly* what they want clubs to do, or just leave it alone and trust that the accountants and auditors know what they're doing.

11 minutes ago, Sparkle said:

Isn’t that the situation we are now sat in? 

Yeah, I read it as Kevin suggesting we make that the default process for everyone, but I think we had slightly crossed wires.

2 hours ago, Spanish said:

I think it is very simple, a specific audit statement that each club is complying with amortization rules as part of the accounts filing process.  No club can be faulted in those circumstances.  I know the auditors sign off the whole set of accounts but in my industry they do that and also provide a reliance confirmation to our regulators

Not sure that would make any difference TBH. The EFL appear to have decided that they know accounting rules better than the auditors, so why would another statement from them change anything?  

And even if they do it for amortization, it could be any other aspect of the accounts next.

9 hours ago, kevinhectoring said:

The EFL will surely need to change things, not least in light of the loophole outlined by Mel in the Al-jazeera documentary.  

The EFl can’t write  their own accounting code. Nor is the problem solved by them telling clubs what policies and practices to use. They need instead to specify where P&S returns must be adjusted, if a club’s accounts do not reflect the EFL’s desired approach  

That's a crazy approach though, unless I'm completely misunderstanding you. You can't have clubs submitting P&S returns and the EFL demanding they change them based on an unknown and undocumented set of rules. 

You'd have the situation where a club can submit a set of accounts that they believe meet FFP thresholds, that have been signed off by auditors, accepted by HMRC etc etc, and the EFL can come back a month later and say we redid your numbers based on rules we didn't tell you about, and now you failed by £Xm so here's a big points deduction?

1 minute ago, Arsene Titman said:

No one has yet provided any evidence of Rooney saying that we would be out of the embargo tomorrow-in my view, that is because he has said no such thing. I am though optimistic that both the club and the EFL want to put an end to the saga. Unless a takeover is imminent, any post embargo transfers will be loans or free transfers.

I haven't seen any of the interviews or anything, but I half wonder if he's said something about how he's hoping for positive news on Tuesday and people have just assumed something and run with it.

53 minutes ago, Ghost of Clough said:

We want to hold the book value of players high until the final year.
What I would do is amortise on a straight line towards zero at the average retirement age (let's say 35), but the remaining amount written off in the final year.

In this example, we sign a 23 year old for £5m on a 5 year deal.
12 years until he's 35 so just over £400k amortisation a year. If he signs extensions keeping him at the club until 35, then it will be the same every year (shown by the blue line).
If he doesn't sign an extension and leaves at the end of his 5 years, then £3.3m will be amortised in the final year (shown by the year line)

I think you'd have to factor playing time in somehow, so you don't have a Thorne or Anya still holding value when they're perma-crocked or just not being used.  I had any player that doesn't play 30 games in a season immediately drops onto a straight-line amortization, but honestly just pick a number and stick to it. 

But beyond that, then as long as it isn't the case of Mel Morris picking his favourite numbers out of a hat, I think it would be fine.

1 hour ago, Crewton said:

I think it's far too subjective for clubs to set their own values for accounting purposes, particularly if those valuations can be set in order to allow greater expenditure. Fair Market Value in football is a pretty loose concept. For example, I'm sure DCFC would have included a residual value for Blackman/Butterworth/Anya towards the end of their contracts, but in reality they were worthless, because no-one would have been daft enough to pay money for them. 

That's what the club was trying to grapple with by getting valuations from agents and pulling values from transfermarkt and other websites. In theory, it's no different to getting estate agent valuations and using sites like Zoopla to value property, although there's obviously a lot of issues with that approach (secrecy of actual player transfer values, lack of established criteria and rigour in valuing players compared to property etc).

I think if you were really committed to doing it, you could come up with something that would be good enough. You'd have to basically remove the clubs input entirely from the process though.  Maybe get 3 agent valuations and 3 website valuations for each player and average them as a starting point.  The have a specified list of rules beyond that - any player over 30 has no resale value, any player that plays less than 30 games in the last calendar year has no resale value, and so on.  Make it a straight forward process that anyone outside the club could re-run and get the same numbers, and document the hell out of it. (Not saying announce it to the public or anything, but there's no reason accountants, auditors or the EFL couldn't be given access.) 

1 hour ago, Crewton said:

If the EFL want to stop clubs spending too much, they should remove player amortisation from the FFP calcs and place more emphasis on cashflow and the simple comparison between income and expenditure, perhaps also set limits for overall gearing.

Still not sure cashflow solves anything. You have situations like Fulham signing Harry Wilson this season but not paying anything until next.  There's far too many ways around it.  The wages/turnover ration used in leagues 1 and 2 is still the best way for me. Let owners put what they want in in terms of transfer fees, but clubs have to be able to finance the on-going costs of those players themselves.

3 minutes ago, kevinhectoring said:

That’s not the point for the EFL. What the EFL wants to ensure is a level playing field - it can’t have clubs tinkering around with levels of amortisation, and their policies,  in order to scrape through P&S. A straight line approach is the cleanest way to do this 

Then the EFL need to make a decision as to whether they're just going to continue to outsource accounting competency (i.e. just keep with the single line rule that says clubs must comply with FRS102 and let the accountants deal with it), or whether they're going to take full control and write their own set of football-specific approved accounting standards. Obviously if they choose the later, it will need a proper vote by clubs, it will need an extensive process to decide what those rules are, it will need them to employ a bunch of accountancy experts to individually approve each clubs books, they will need proper enforcement processes in place, they'll need to deal with how it affects clubs being promoted/relegated in and out of the EFL, and it will obviously need the clubs to vote to pay for all of that.

What can't carry on is for the EFL to have that single line rule, and then every now and then arbitrarily decide it wants to enforce some fantasy accounting standard that doesn't seem to exist in the real world because one club did something it arbitrarily decided it didn't like.

2 minutes ago, RoyMac5 said:

No. And that is the point. We all knew Hughes would go for a massive fee when we sold him.

Maybe some of the clubs supposedly interested look a bit deeper at the player than the fans do?

The thing with Hughes was, we sold him at the lowest point his value could have been.  He'd just had a season out injured, had barely played himself back to fitness and had been told by a manager he wasn't wanted.  If he'd stayed and had a similar season here to the one he had at Watford, where he'd had a slow start but established himself in the team and was playing very well by the end (and that was in the prem as well, don't forget), we'd have potentially got far more than we sold him for.

The same is happening with Sibley (if it's actually happening...).  If we'd sold him off the back of his breakthrough season we'd have got far more for him than we'd get for him now off the back of a tough season where he's allegedly not wanted by the manager.

I'm not starting sharpening my pitchfork purely on the word of a random person on the internet (no offence intended to anyone)...

But *if* we sell Sibley now for basically nothing, it's probably the most stupid decision we've made as a club since the last time we decided to sell our best young midfielder for a fraction of what he was worth, because an idiot manager decided he didn't want to play him.

1 hour ago, Boycie said:

You do know he’s had serious health issues don’t you? Somethings are bigger than the club.

We’re a multi-million pound turnover business. If the successful operation of that business is completely and utterly dependant on one single bloke, then our organisational structure is ****** beyond belief.

23 hours ago, Marriott Ram99 said:

Waste of money tbh, quality player and not his fault but wjen you don't have much money and spend a significant amount on one player this is what happens with a bit of bad luck. Should have spread the money out more. 

I know what you're getting at, but the problem with that approach is you just end up with a load of average players. We could have spent the £10m Bielik money on 3 players and basically end up with the equivalent of Nick Blackman, Scott Malone and Ikechi Anya for £3-4m each.  None of those players are even better than the players we already had, and we could probably have picked up at least as good players for free.

Obviously Bielik has suffered badly with injuries, but when you look at him play, he clearly fits the way we want to play, he addresses a big need we had, he's young enough with potential that he *should* have had big potential resale value and so on.  He's basically everything that the majority of our other signings clearly aren't.  I'd much rather have a proper plan in mind and spend what money we do have on someone that fits and then plug the rest with frees/loans/youngsters, than sign a load of random bang-average players that just leave you with a bang-average, over-paid team.

55 minutes ago, MackworthRamIsGod said:

Genuine question, I've seen one or two people mention the word Disney with regards the takeover, is there a link to Disney and who is buying Derby, or is it just a reference to the last American takeover we had when it was falsley reported we were being purchased by Walt himself?

I think they were just calling us a Mickey Mouse club...

21 minutes ago, Reggie Greenwood said:

See the tweet I embedded from John Percy. No way we owe PC 8mill 

It wouldn't surprise me if we'd done some kind of gardening-leave type thing, so instead of paying him a lump sum in compensation, we're still paying some fraction of his wages until he gets another job.  So maybe if he doesn't get another job for the next 4 years, we might in theory end up paying him £8m, which fits with Morris quote's about it being a worst case scenario.

Likewise, the £20m HMRC bill is presumably deferred PAYE/NIC etc, so it will have to be paid, but they're not going to be demanding it all tomorrow. Many clubs, and many other businesses in general, will have used this scheme, and if HMRC start demanding massive payments upfront, they're just going to cause mass bankruptcies, so they will probably take a sensible approach.

The Dell loan also presumably has a payment schedule attached. They won't be demanding £15m tomorrow.

The entire article seems to be taking the worst case scenarios, and the total payable over many years, and assuming we owe it all tomorrow.