Changes to accounting procedures to affect FFP?

[CornwallRam]

I thought that I'd lighten the mood by posting the most boring thread of the year.

Now I'm a historian not an accountant. When I read something that I don't fully understand, I have a personality defect which means I can't rest until I've made myself understand it - which is good for a historian, but not good for things like a social life. So this thread is a plea to those with better knowledge of accounts than me to help me decipher some accountancy changes.

From what I can gather, from this season clubs have to adopt a new set of accounting rules - FRS 102. I'm told that this will have an impact on FFP. Company assets will have to be revalued and the rules for amortisation alter slightly to involve more front loading. It seems that this will make most clubs fail FFP this season - I presume that there will be something like a one off amnesty where penalties are waived if they would have passed the old rules.

Can anyone shed any more light on this? Am I even correct in saying that there will be changes - I've been unable to find very much written on it at all?

[oomarkwright]

Ramblur. Where are you?

[lrm14]

5 hours ago, CornwallRam said:

I thought that I'd lighten the mood by posting the most boring thread of the year.

Now I'm a historian not an accountant. When I read something that I don't fully understand, I have a personality defect which means I can't rest until I've made myself understand it - which is good for a historian, but not good for things like a social life. So this thread is a plea to those with better knowledge of accounts than me to help me decipher some accountancy changes.

From what I can gather, from this season clubs have to adopt a new set of accounting rules - FRS 102. I'm told that this will have an impact on FFP. Company assets will have to be revalued and the rules for amortisation alter slightly to involve more front loading. It seems that this will make most clubs fail FFP this season - I presume that there will be something like a one off amnesty where penalties are waived if they would have passed the old rules.

Can anyone shed any more light on this? Am I even correct in saying that there will be changes - I've been unable to find very much written on it at all?

The reductions in a players valuation would probably come from their contracts ie the amount of years left on it and how much they're on.

[RamNut]

FRS 102 is a single reporting standard of 350 pages, which replaces all extant FRSs, SSAPs and UITF Abstracts. It is based on the IFRS for SMEs, however the text of the IASB's standard has been amended in some significant respects in order to: Comply with the Companies Act.

i think thats it in a nutshell mate.

close thread

[JoetheRam]

Not my exact area of expertise, and CBA to sift through 350 pages of accounting regulations, but the main things I can find:

I don't know how Derby's accounts work but hypothetically:

- If Mel has loaned the club money to be repaid at a favourable interest rate, we may now have to revalue the repayments at the market rate which would probably be higher, which would reduce cashflow, but I doubt this is an issue for us.

- Assets (players) which have become impaired may face higher amortisation/depreciation charges in the first year following adoption of the new standards.

- The residual value of the stadium could possibly be revalued (upwards) thereby increasing the value of the clubs assets.

As I said though, no expert.

I'm now off to re-read my post and fall asleep.

[Rample]

Someone tag me when there is a synopsis of no more than 4 lines that is suitable for 5 year olds to understand please.

It did need changing as the current system sees players lose way too much value, and flops end up costing you twice.

[richinspain]

On 15/8/2017 at 19:32, RamNut said:

FRS 102 is a single reporting standard of 350 pages, which replaces all extant FRSs, SSAPs and UITF Abstracts. It is based on the IFRS for SMEs, however the text of the IASB's standard has been amended in some significant respects in order to: Comply with the Companies Act.

i think thats it in a nutshell mate.

close thread

Thanks for clearing that up ??‍♂️

[ossieram]

On 8/15/2017 at 18:32, RamNut said:

FRS 102 is a single reporting standard of 350 pages, which replaces all extant FRSs, SSAPs and UITF Abstracts. It is based on the IFRS for SMEs, however the text of the IASB's standard has been amended in some significant respects in order to: Comply with the Companies Act.

i think thats it in a nutshell mate.

close thread

Can this be translated in English please?

[G STAR RAM]

Cant see too many changes.

As a previous poster said, depreciation/amortisation will probably be the areas where there are potential 'savings' to be made.

[sage]

On 15/08/2017 at 14:37, CornwallRam said:

I thought that I'd lighten the mood by posting the most boring thread of the year.

Now I'm a historian not an accountant. When I read something that I don't fully understand, I have a personality defect which means I can't rest until I've made myself understand it - which is good for a historian, but not good for things like a social life. So this thread is a plea to those with better knowledge of accounts than me to help me decipher some accountancy changes.

From what I can gather, from this season clubs have to adopt a new set of accounting rules - FRS 102. I'm told that this will have an impact on FFP. Company assets will have to be revalued and the rules for amortisation alter slightly to involve more front loading. It seems that this will make most clubs fail FFP this season - I presume that there will be something like a one off amnesty where penalties are waived if they would have passed the old rules.

Can anyone shed any more light on this? Am I even correct in saying that there will be changes - I've been unable to find very much written on it at all?

@ramblur

[ramblur]

On 8/15/2017 at 12:37, CornwallRam said:

I thought that I'd lighten the mood by posting the most boring thread of the year.

Now I'm a historian not an accountant. When I read something that I don't fully understand, I have a personality defect which means I can't rest until I've made myself understand it - which is good for a historian, but not good for things like a social life. So this thread is a plea to those with better knowledge of accounts than me to help me decipher some accountancy changes.

From what I can gather, from this season clubs have to adopt a new set of accounting rules - FRS 102. I'm told that this will have an impact on FFP. Company assets will have to be revalued and the rules for amortisation alter slightly to involve more front loading. It seems that this will make most clubs fail FFP this season - I presume that there will be something like a one off amnesty where penalties are waived if they would have passed the old rules.

Can anyone shed any more light on this? Am I even correct in saying that there will be changes - I've been unable to find very much written on it at all?

I've said before that I'm not going to wade through the financial reg,but @Diag Ram did touch on it in the accounts thread.Under the old system,where the fee was amortised out over the length of the contract,the net book values tended not to give a true value of the assets.I think that the allocation of residual values is seen as the way to get over this issue.The amortisation in fact reduces significantly as a result of the change,however if the RV turns out to be too high there's a hit when you try to move the player on.I'll give 2 examples:- 1) The RV for Ince would have been ok,and we've almost certainly made a profit on the sale (but not as much as if the old amortisation method had applied,but the balacing factor here would have been more amortisation charged in earlier years,so swings and roundabouts).....2)I hate picking on someone,but probably the starkest example may be Butterfield.Under the old method,his book value would have been a lot less than it now is,and it would have been a lot easier to move him on (if that were the wish). Of course,his form could improve,along with his value (which is why I didn't give Vydra as the best example).

I'd advise non accountants to avoid looking at this reg-great way to get a bad head!