EFL Verdict

[RoyMac5]

6 minutes ago, Shipley Ram said:

https://www.accountingweb.co.uk/business/financial-reporting/arbitrator-red-cards-derbys-amortisation-policy

It's not just Derby fans that think we're being singled out:

Quote

League gunning for Derby

Plumley said the EFL will want to make an example of Derby to deter other clubs from revamping their amortisation policies to exploit FFP loopholes.

 

[RadioactiveWaste]

4 minutes ago, RoyMac5 said:

"Dan Plumley, a sport finance expert at Sheffield Hallam University, said the integrity of the EFL’s profit and sustainability rules were at stake, but saw no end to creative accounting to beat the FFP system.

“One of the major downsides with financial fair play from day one is that clubs have always been looking to circumvent the regulations to work in their favour,” he said.

“This is a new thing. We saw that with stadium sales as well… one club did it and two or three followed suit. I have no doubt we will see something else crop up in the future."

He added: “I’m sure some people will call it cheating. I’m sure some people will call it creative and inventive. But whichever way you cut it, it’s designed with financial fair play in mind and that’s what the clubs are looking at – how do they comply with those regulations in whatever way possible?”

?

We're not the first, won't be the last.

The loophole we were trying to exploit has been resolved. The rule doesn't "need" to be rewritten as the precedent has been set (through this process, not by any previous standard or rule) that straight line is the only appropriate method for amortisation.

Are we uniquely awful for what we did? Probably not. Was it wrong to do it? Well we have to bring our practice in line now and it was to try and manipulate things, so at the very least a questionable grey area (and in my view, probably wrong)

And the EFL did accept our P&S calculations (based on our accounts) - and the charge stems from them.

 

[RoyMac5]

Just now, RadioactiveWaste said:

The loophole we were trying to exploit has been resolved. The rule doesn't "need" to be rewritten as the precedent has been set (through this process, not by any previous standard or rule) that straight line is the only appropriate method for amortisation.

How so?

[Van der MoodHoover]

4 minutes ago, RoyMac5 said:

How so?

By coming into being as an "unwritten rule" by the look of it.... ?

[curb]

1 hour ago, i-Ram said:

 DCFC have been victims of a miss-selling scam that has been going on for ages, and it still persists to this day.

What scam is that then?

[Shipley Ram]

I'm interested in what Stoke look to have done, they seem to have nill valued a lot of their players chalking it up to Covid losses. Of course this will allow them to throw money at the problem later. This seems to be against the view from our case that the straight line method is appropriate. Will this be accepted? If this is accepted does it mean if they get a fee for one of their nilled players at a later date the whole method will be invalidated and they will have to resubmit accounts based on the straight line method? Or will it be fine unless they pip Middlesbrough to the last playoff spot in a few years?

[i-Ram]

1 minute ago, curb said:

What scam is that then?

A vulnerable person (Morris) is approached by an unscrupulous person (an agent or EFL club representative) offering goods that are clearly not fit for purpose, and at a greatly exaggerated price compared to market value. Said vulnerable person not only pays the exaggerated price, but also gets taken in by a third party’s sob story (a player) who suggests that moving to Derby without significant financial security would be a huge issue for his wife and family, who are happily homed and schooled in an idyllic part of England (say, Bradford). Said vulnerable person promises to compensate third party hugely be it by salary or length of contract, or indeed offering family members a job in the scouting department. At vulnerable persons request third party agrees to stand gooning in a picture with vulnerable person, both draped in black and white scarf.

It’s a modern day scandal I tell thee.

[curb]

But if those goods were fit for purpose when they left the seller’s premises, and got misused and broken by the aforementioned ‘vulnerable person’, then it’s not the fault of the seller, is it?

[i-Ram]

1 minute ago, curb said:

But if those goods were fit for purpose when they left the seller’s premises, and got misused and broken by the aforementioned ‘vulnerable person’, then it’s not the fault of the seller, is it?

Are you a seller, agent, player or from the EFL Curb?

For the record, I am not being entirely serious.

[curb]

2 minutes ago, i-Ram said:

For the record, I am not being entirely serious.

Yes, I got that.

neither was I ?

Edited June 27, 2021 by curb

[Spanish]

8 minutes ago, Shipley Ram said:

I'm interested in what Stoke look to have done, they seem to have nill valued a lot of their players chalking it up to Covid losses. Of course this will allow them to throw money at the problem later. This seems to be against the view from our case that the straight line method is appropriate. Will this be accepted? If this is accepted does it mean if they get a fee for one of their nilled players at a later date the whole method will be invalidated and they will have to resubmit accounts based on the straight line method? Or will it be fine unless they pip Middlesbrough to the last playoff spot in a few years?

I fear there will be a lot more leniency towards post covid problems and we will be unlucky in our timing.  Stoke's approach is a pi55 take IMO.  If they are not pulled up everybody will be jumping on this apart from us, crying shame

[Comrade 86]

1 hour ago, Spanish said:

Not stalking you really but you are the first professional accountant that has been patient enough with me to validate their credentials.

FTFY

Edited June 27, 2021 by 86 Hair Islands

[angieram]

39 minutes ago, Van der MoodHoover said:

By coming into being as an "unwritten rule" by the look of it.... ?

Is this similar to 'case law'? Once a decision has been reached then it becomes the acceptable interpretation going forward.

Although in our case we have two different interpretations so I think it is 1-1 after extra time. I think we should settle it on penalties - just put Roos in goal! ?

[RadioactiveWaste]

47 minutes ago, RoyMac5 said:

How so?

The rule doesn't "need" to be rewritten as the precedent has been set (through this process, not by any previous standard or rule) that straight line is the only appropriate method for amortisation.

Becasue if anyone tries to do what we did regarding amortisation in future, the ruling in this case sets the precedent that the straight line method is what is acceptable and it is not acceptable to not do that. The whole case rested on interpretation and there is now a decision on what interpretation is and will therefore be going forward.

[RadioactiveWaste]

2 minutes ago, angieram said:

Is this similar to 'case law'? Once a decision has been reached then it becomes the acceptable interpretation going forward.

Although in our case we have two different interpretations so I think it is 1-1 after extra time. I think we should settle it on penalties - just put Roos in goal! ?

I think that's exactly how it works (i.e. case law). The LAP was the penalties and the Straight Line interpretation advances and the revaluing interpretation books its flight home.

[Ramslad1992]

1 hour ago, Shipley Ram said:

I'm finding it very annnoying that I'm spending my Sunday moring reading accounting web rather than something to do with actual football/cricket/TDF.

https://www.accountingweb.co.uk/business/financial-reporting/arbitrator-red-cards-derbys-amortisation-policy

Taken from that article...

’which will just make a complete mockery of financial fair play’ 

i Think the EFL have don’t that themselves really. 

[Sparkle]

2 hours ago, i-Ram said:

I do hope that when the full DC decision is revealed that the appeals committee confirm that they come to the conclusion that £100k was a sufficient penalty given when the Rams purchased Butterfield, Johnson, Blackman, Anya and Camara, they did genuinely think they were buying some players with some enduring value. DCFC have been victims of a miss-selling scam that has been going on for ages, and it still persists to this day.

There lies the problem we purchased those players from Huddersfield Norwich Reading watford Middlesbrough etc for vastly inflated fees, which enabled them to keep going financially and are now bitter that they are no longer receiving that kind of money from us. whilst the other clubs are bitter that we have never purchased their useless plods for vastly inflated fees to enable them to similarly pay their own bills and all this has been complained about to the EFL who have great sympathy for the other clubs hence all the EFL muck ups.

[Comrade 86]

9 minutes ago, RadioactiveWaste said:

The rule doesn't "need" to be rewritten as the precedent has been set (through this process, not by any previous standard or rule) that straight line is the only appropriate method for amortisation.

Becasue if anyone tries to do what we did regarding amortisation in future, the ruling in this case sets the precedent that the straight line method is what is acceptable and it is not acceptable to not do that. The whole case rested on interpretation and there is now a decision on what interpretation is and will therefore be going forward.

Apologies RAW but I don't agree with this at all. Firstly, we are not debating jurisprudence here. The EFL is merely an independent governing body. Secondly, its not an either or equation. There at least half a dozen different forms of amortisation, so the 'precedent' you allude to only closes the loop on the single methodology we have employed.

The only manner in which the EFL can formally address this and prevent other clubs from continuously exploring other potential nuances, is very much by rewriting the rule to state unequivocally that straight line amortisation is the only method they will entertain. Their current stance makes as much sense as a farmer leaving a gate open, then blaming his sheep (sorry!) for leaving the field, so their only redress would be to ensure the gate remains closed save for when they choose to open it.

[RadioactiveWaste]

1 hour ago, Shipley Ram said:

I'm finding it very annnoying that I'm spending my Sunday moring reading accounting web rather than something to do with actual football/cricket/TDF.

https://www.accountingweb.co.uk/business/financial-reporting/arbitrator-red-cards-derbys-amortisation-policy

"But in 2015 Derby decided to assign residual values (the expected value) for players at the end of their contracts."

That's not true and the EFL withdrew that part of the charge. At the end of the contract the value is £0. The policy allowed the value in between to be "what might be exected in the market" instead of depreciated in a straight line. It does leave scope to "manipulate" things but over the length of the contract the effect is the same. Something that seems surprisingly not understood by a lot who reported on it.

[RoyMac5]

2 minutes ago, 86 Hair Islands said:

There at least half a dozen different forms of amortisation, so the 'precedent' you allude to only closes the loop on the single methodology we have employed.

?

But does it close the loophole, or just demand that users explain their methodology better than we did when submitting our accounts ie no fag packet working out accepted!? ?