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LE_Ram

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  1. I'd love to put another £32 into the club, but the ticket office are being obtuse for no real reason. To be honest, the communication with the ticket office has been shocking, the only method of contacting them is email which takes them 3 days to respond to.
  2. Still seems to be a lot of empty seats remaining for this one. There could be one less but the club won't let me move my ticket one row down where there are spare seats so I can buy an extra ticket for someone who's now decided they want to come...
  3. Does anyone even know how to get in touch with the ticket office? All the phone lines still don't work. Seems a pretty poor service IMO, charging 13p a minute in full knowledge that you can't get through
  4. LE_Ram

    EFL appeal

    Yeah, exactly. Any accounting standards - be it FRS102 or anything else - can't possibly legislate for every possible transaction, or it would be impossibly long and unwieldy. Hence, the generic guidance, and the overarching principle that "Transactions and other events and conditions should be accounted for and presented in accordance with their substance and not merely their legal form." To me, it seems that Derby have accounted for the substance of the transaction by including the fact that they expect to sell any given player, and the EFL have simply argued for the legal form by saying that such a sale isn't guaranteed.
  5. LE_Ram

    EFL appeal

    Yep, and even if you discard the merits of each party's argument/interpretation, it's a bit pathetic that it's come to this really. Derby could potentially be punished based on the fact that we interpreted a standard one way, and the witness the EFL found interpreted it another. How does any of this help English Football? Why does the EFL find it necessary to appeal against the initial decision? Quite simply the EFL isn't fit for purpose.
  6. LE_Ram

    EFL appeal

    Having read that document, it seems that the EFL's appeal against the decision has succeeded based on one charge, which is that the future benefits from owning a player's registration extend only to their ability to play matches and their possible resale shouldn't be considered. To me it's just silly - in the original decision, you have the DC going down point-by-point, referring to FRS102 and why DCFC's accounting treatment was compliant with this. In the appeal, you have "Professor Pope", explaining why he disagrees with that. The whole point of accounting standards is to act as a guide, and overarching the whole shebang is the principle of "substance over form" - it's clear that the EFL's witness is an academic because his argument reads like such a conceptual interpretation rather than (as should be) an application of the standards, bearing in mind that the most crucial point is that the substance of a transaction is more important than the form of it. You've got two different sets of people, both reading the same standards, and coming to different conclusions.
  7. LE_Ram

    EFL appeal

    Do you have a link to where it’s available?
  8. LE_Ram

    EFL appeal

    Yes, I for one will be extremely interested to see whether the EFL publish the justification of their assertion that the accounting treatment is non-compliant
  9. LE_Ram

    EFL appeal

    Ah yes, based on some of the performances this season I’d say most of the squad have a pretty low value in use…
  10. LE_Ram

    EFL appeal

    Don’t quote me on this, not super hot on tax, but I believe that IFA Amortisation (unlike depreciation) is an allowable deduction for Corporation Tax. However as you say we’re loss making, plus the net P&L impact under either amortisation method is the same so will have the same tax impact too.
  11. LE_Ram

    EFL appeal

    Yep so assuming Derby chose to amortise the players contract over the length of their contract, they would have nil residual value at the end of their contract. For example, take a scenario where Derby sign a player for £4m on a 4 year contract. The EFL argue that the only economic benefit a club gets from the player is them playing matches, and at the end of their contract they can leave for £nil - so you would amortise in line with that economic benefit - the player is expected to play over their contract so you would amortise their registration fee over the 4 years on a straight line - £1m per year gets expensed and increases your loss/decreases the profit. If they leave on a free at the end of their contract, you’ve already amortised down to £nil so there’s no impact to your profit - the carrying amount is £nil and your proceeds on the sale are £nil so there’s no profit or loss. In that situation, if a player leaves at the end of year 3 for £3m, they’d have had 3 years of amortisation so be carried in the accounts at £1m, and you’d recognise a profit on the sale of the player of £2m. Derby however say that they get more than just the benefit of the player playing matches, in that they also expect them to be sold before contract expiry. So your economic benefits are the player playing matches and the cash you get in from selling them. This is where ERV comes in - expected recoverable value - this is the amount Derby expects to be able to sell a given player for. Some players won’t be given an ERV if Derby don’t expect to sell them - for example, if our player above was 34 and expected to retire after playing at Derby, the treatment would be the same - £1m charged every year and no value at the end. However, if it was someone like, say Joz, well DCFC would argue that if he plays well they’ll sell him on - so they decide when and for how much do we think we’ll sell. For example, if they think they’ll sell the player for £3m in three years, they will only charge £333k per year amortisation because you’d expect that by the time they’re sold for £3m, they’re carried in your accounts for £3m. In both situations, the net P&L impact is the same over the whole contract - it’s just using Derby’s method the profits you make on a transfer are smaller, because your player is valued higher in your accounts, because you’ve charged less total amortisation. It’ll be interesting to read why the EFL have won this appeal, because as far as I’m aware, both are compliant with the accounting standard.
  12. LE_Ram

    EFL appeal

    You can allocate a residual value to an intangible asset under FRS102, provided that: - There is a commitment by a third party to buy it at the end of its useful life, OR - There is an active market for the asset, and its residual value can be determined by reference to the market, and the market will exist at the end of the asset's useful life. So it looks like Derby are saying - there's clearly an active market for players, and we buy players with the expectation of selling them at the end of their contracts, so it's not fair to allocate a RV of nil because that's ultimately not representative of the true situation. But the EFL says, well at the end of the contract, the player can leave on a free, so you need to amortise down to a RV of nil. Without looking at the detail for each player it's tough, because some players (probably someone like Jozwiak), DCFC will expect to sell before his contract is up, and so will have some sort of RV; but some like CKR will probably not be sold and should be amortised down to nil value. There's ultimately a lot of judgment around it because the RV should be set at the amount that Derby will eventually get for the player - who knows how much we'll sell Joz for in a few years, there are so many factors. But in terms of whether it's allowable under FRS102 to allocate a non-nil residual value to an intangible, yes it is.
  13. LE_Ram

    EFL appeal

    The EFL move most things at a glacial pace, however I wouldn't put it past them that the one time they get their finger out is to screw over DCFC...
  14. LE_Ram

    EFL appeal

    As an external auditor myself, one of our key jobs in any financial audit is ensuring that the accounting policies comply with the applicable standards (as others have mentioned, FRS102). I personally haven't ever audited a football club, but seeing as the intangible assets are such a material part of the balance sheet I'm sure that any auditor would be massively thorough in auditing that balance (and the amortisation to go along with it). The auditors sign off to say that the accounts are prepared in line with the applicable standards, so surely they must be. How the EFL can go back now and say that they're not is beyond me.
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