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Tribunal Update


Shipley Ram

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55 minutes ago, Tamworthram said:

The thing about football is that the value of it’s key asset (for clubs that don’t own their own stadium), the players registration, is somewhat different to the assets of most other businesses. It’s not like you’ve bought a piece of machinery that you know you’re going to have to replace in x years - at the end of those years the machinery's value is probably nil so you can depreciate it on a straight line basis. We all know that the value of a players registration may go down, stay the same or even go up during the period of his contract. Even in the player’s final year. Therefore, there is no ideal model for amortisation. Also, it all evens its self out in the end so, any benefit we may have gained would only have been short term (I agree with your assumption that it was probably adopted to overcome the Clement overspend). I’m sure I read, or heard, somewhere that a number of premier league clubs use the same (or similar) policy as us.
 

I think the EFL should determine the policy to be used and the same should be adopted by all clubs.

If this came from a special decision that considered 'well this is the better way of dealing with amortisation' I would be happier.  I just have real concerns about our motivation.  Our experience has pretty much been that our machines are worthless at the end of their lifetime.  I guess we have been unlucky but nevertheless the policy change helped us through a couple of bad years until we were able to sell the major club asset to stop the bleeding.  Hindsight is perfect but I admit to getting a little tired of hearing that everything is rosy at DCFC and this is all the EFL's fault because they are nasty beastly people.  We have our own part to play in this saga.  The FFP and P&S was poorly thought out and badly implemented by the EFL that there can be no doubt of

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3 hours ago, angieram said:

Having slept (badly) on this news I  am still feeling devastated, to be honest.

It seems to me to be a further huge drain of resources - money, time and focus - that will occur before it is settled. What a waste of all three that should be being spent to help all EFL clubs to better navigate the perilous tides of post pandemic football.

While this is happening, where is the guidance and steer from the EFL to help clubs through to calmer waters? Sadly not in evidence, four days before the start of the season. 

The previous independent commission found that the EFL weren't acting maliciously in bringing these charges. I wonder what they are thinking now?

Will be fun if we beat them again though. Can you imagine how good our club statement will be?

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15 minutes ago, CornwallRam said:

Yes, and they'd be right. I also think their problem is that other clubs could revisit their accounts to see if our method would have gotten them clear of FFP/P&S sanctions - maybe Brum or the Wendies could revisit their verdicts. 

That's not our problem though. All we have to show is that we acted within the rules - not that the rules were fit for purpose. 

it would enable a club to look at the figures and decide on valuations based on the need to meet P&S; not for a moment am I suggesting we did this

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15 minutes ago, Spanish said:

If this came from a special decision that considered 'well this is the better way of dealing with amortisation' I would be happier.  I just have real concerns about our motivation.  Our experience has pretty much been that our machines are worthless at the end of their lifetime.  I guess we have been unlucky but nevertheless the policy change helped us through a couple of bad years until we were able to sell the major club asset to stop the bleeding.  Hindsight is perfect but I admit to getting a little tired of hearing that everything is rosy at DCFC and this is all the EFL's fault because they are nasty beastly people.  We have our own part to play in this saga.  The FFP and P&S was poorly thought out and badly implemented by the EFL that there can be no doubt of

The Decision Document sort of indicates that it wasn't simply to solve our overspending. I've always interpreted it as we saw an opportunity to change our policy, which allowed us to spend as much as we did.

 

"In 2015 the Group of which the Club is a part was restructured. During the course of that restructuring the Club had discussions with its auditors – Smith Cooper, and in particular Andrew Delve – about the treatment of intangible assets in the Club’s financial statements. Those discussions were part of wider discussions that took place at that time about the transition to FRS 10214 and the consequences of that transition for the Club."

"That a straight line basis of amortising the capitalised costs of a player’s registration over the period of a player’s contract might not necessarily be the methodology that most appropriately reflected the pattern in which the Club in fact consumed (at least in Mr Pearce’s eyes) the economic benefits of such intangible assets."

"Following those discussions the Club decided to adopt a different approach to amortisation of the capitalised cost of player registrations. That ‘different approach’ – which we consider in greater detail below – was implemented by the Club in each of the financial years to which the Second Charge relates, namely the financial years ended 30 June 2016, 30 June 2017 and 30 June 2018."

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18 minutes ago, The Scarlet Pimpernel said:

But it would ultimately catch up at the end of the contract surely?

yep.  but if you kick can down the road a bit by extending contracts you may be able to use a windfall income (say sell your stadium) to deal with it at a comfortable moment I would guess

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2 minutes ago, Spanish said:

yep.  but if you kick can down the road a bit by extending contracts you may be able to use a windfall income (say sell your stadium) to deal with it at a comfortable moment I would guess

Yes agreed but that to me doesn't seem to be breaking any rules. Just good business practice in dealing with the structure given.

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10 minutes ago, Ghost of Clough said:

The Decision Document sort of indicates that it wasn't simply to solve our overspending. I've always interpreted it as we saw an opportunity to change our policy, which allowed us to spend as much as we did.

 

"In 2015 the Group of which the Club is a part was restructured. During the course of that restructuring the Club had discussions with its auditors – Smith Cooper, and in particular Andrew Delve – about the treatment of intangible assets in the Club’s financial statements. Those discussions were part of wider discussions that took place at that time about the transition to FRS 10214 and the consequences of that transition for the Club."

"That a straight line basis of amortising the capitalised costs of a player’s registration over the period of a player’s contract might not necessarily be the methodology that most appropriately reflected the pattern in which the Club in fact consumed (at least in Mr Pearce’s eyes) the economic benefits of such intangible assets."

"Following those discussions the Club decided to adopt a different approach to amortisation of the capitalised cost of player registrations. That ‘different approach’ – which we consider in greater detail below – was implemented by the Club in each of the financial years to which the Second Charge relates, namely the financial years ended 30 June 2016, 30 June 2017 and 30 June 2018."

good quote thanks.  it is probably just a fluke that the period where our player assets were becoming valueless occurred at the same time as this.  I really can see where the club were going with this but the timing is a bit suspicious don't you agree?  Both methods are a little odd and contrived really but the impact of ending up with large costs that will hit the club in a single year rather than over a period is dramatic and has resulted in us selling our prime asset.  It would have been  nice to have crystallized the revaluation and produced an injection of headroom in P&S that would have projected the club upwards..  Like I have said hindsight is perfect

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4 minutes ago, The Scarlet Pimpernel said:

Yes agreed but that to me doesn't seem to be breaking any rules. Just good business practice in dealing with the structure given.

I am not arguing with your pov just that I don't really believe that good business practice would result in us selling PP.

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4 minutes ago, The Scarlet Pimpernel said:

In an ideal world I agree but in striving for the PL a club may have to utilise all assets. 

But we apparently have 'wasted' the only significant asset the club owned not for the future aims but to clear up the past, now what?

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I'm honestly not sure what they hope to achieve here?

The third person on the original Disciplinary Commission was James Stanbury, a forensic accountant.

https://www.bakertilly.com/contact/directory/james-stanbury

Quote

James Stanbury is a partner with Baker Tilly and has 25 years’ experience of forensic accounting and dispute resolution.

His experience covers a wide range of commercial and personal litigation matters which focus on the investigation and evaluation of economic damages worldwide resulting from loss of profit, business interruption, business valuation, breach of contract, professional indemnity, subrogation, cyber and injury/fatal claims.

He has a special interest in the valuation of businesses and their assets, in both commercial and litigation contexts, arising from compulsory purchase orders, purchase/sale, professional negligence claims, shareholder disputes and intellectual property disputes.

I mean if he doesn't think our amortisation policy for intangible assets was against accounting rules, then who else would?

It also mentions in the report that for a year since the change in amortisation policy in question the Smith Cooper audit file was picked for a review by the ICAEW (Institute of Chartered Accountants in England and Wales) and was found to be compliant.

If both of these things don't tell the EFL that it is compliant and they are wrong in claiming it isn't, what will?

If you read through the outcome the decision was very well explained, well reasoned, and completely logical. It seemed the EFL's witness, Professor Pope, put a huge amount of focus on one word 'systematic' and he even tried to tell them the dictionary definition of the word, like they couldn't look for themselves.

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