Embargo.

[The Scarlet Pimpernel]

29 minutes ago, Elwood P Dowd said:

I agree with the above but the issue does go a little deeper than just not flagging our different amortisation policy clearly enough. We were not instructed by the Disciplinary Pannel to just provide clearer notes for our different amortisation policy we were instructed to "redo" the accounts and resubmitt them. In redoing the accounts there is, as we know, a possiblity that the accounts might show that we have breached FFP. 

That is correct but I thought we were discussing the original ruling from the DP. Wasn't it the LLP who wanted more?

Edited August 26, 2021 by The Scarlet Pimpernel

[Carl Sagan]

39 minutes ago, Elwood P Dowd said:

I agree with the above but the issue does go a little deeper than just not flagging our different amortisation policy clearly enough. We were not instructed by the Disciplinary Pannel to just provide clearer notes for our different amortisation policy we were instructed to "redo" the accounts and resubmitt them. In redoing the accounts there is, as we know, a possiblity that the accounts might show that we have breached FFP. 

This isn't correct in terms of the original Disciplinary Commission, who vindicated us and simply said the change of amortization was fine but we might have made it clearer that we'd done it. Only then did the EFL decide (very wrongly in my view) that they would come after us with an appeal and only after that have we had to go through the palaver of redoing the accounts. Which the EFL hope will lead to a points deduction when they expressed their bitter disappointment at not getting that with the appeal.

[Bald Eagle's Barmy Army]

It’s clear to see that the EFL will hold on to all the accounts and not give an answer until the transfer sundown closes

[i-Ram]

6 minutes ago, Bald Eagle's Barmy Army said:

It’s clear to see that the EFL will hold on to all the accounts and not give an answer until the transfer sundown closes

[Spanish]

15 minutes ago, Carl Sagan said:

This isn't correct in terms of the original Disciplinary Commission, who vindicated us and simply said the change of amortization was fine but we might have made it clearer that we'd done it. Only then did the EFL decide (very wrongly in my view) that they would come after us with an appeal and only after that have we had to go through the palaver of redoing the accounts. Which the EFL hope will lead to a points deduction when they expressed their bitter disappointment at not getting that with the appeal.

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

 

[Elwood P Dowd]

46 minutes ago, Carl Sagan said:

This isn't correct in terms of the original Disciplinary Commission, who vindicated us and simply said the change of amortization was fine but we might have made it clearer that we'd done it. Only then did the EFL decide (very wrongly in my view) that they would come after us with an appeal and only after that have we had to go through the palaver of redoing the accounts. Which the EFL hope will lead to a points deduction when they expressed their bitter disappointment at not getting that with the appeal.

It doesnt realy matter how we got here, the £100k fine and the slap on the wrist are not the real issue here they are only a minor anoyance, its the outcome of the instruction to, submit restated accounts for financial years ending 30 June 2016, 2017 and 2018 that meet the requirements of FRS102, together with updated Profit & Sustainability calculations if necessary, that may come back to bite us

Although, in June we were issued  sanctions for not meeting standard FRS102 the real issue is the amortisation policy the club used in 30 June 2016, 2017 and 2018 accounts. Perhaps the EFL have been quite clever here in that they have used the Disciplinary Commission to open up and force the club to restate the accounts, probably in the hope we have breached FFP.

The Disciplinary Commission's findings in June only added to our issues with the EFL.

from June 2021

In May, an Independent League Arbitration Panel ruled that the Disciplinary Commission was wrong to dismiss the League’s expert accountancy evidence, which demonstrated that the Club’s policy regarding the amortisation of player registrations was contrary to standard accounting rules. 

More specifically, the panel determined that the Club’s policy was not in accordance with accounting standard FRS102 because it failed to accurately reflect the manner in which the Club takes the benefit of player registrations over the lifetime of a player’s contract. 

Tonight, the Disciplinary Commission has announced that the sanction to be imposed in respect of those breaches, is a financial penalty of £100,000 to be paid to the EFL and a reprimand for the Club as to its future conduct regarding the preparation of its Annual Accounts.

In addition, the Club has also been ordered to file restated accounts for financial years ending 30 June 2016, 2017 and 2018 that meet the requirements of FRS102, together with updated Profit & Sustainability calculations if necessary.

https://www.efl.com/news/2021/june/-Derby-county/

https://www.frc.org.uk/getattachment/69f7d814-c806-4ccc-b451-aba50d6e8de2/FRS-102-FRS-applicable-in-the-UK-and-Republic-of-Ireland-(March-2018).pdf

 

 

 

Edited August 26, 2021 by Elwood P Dowd

[Bald Eagle's Barmy Army]

46 minutes ago, i-Ram said:

Just took me ages to work that out until I re-read my comment ?

[duncanjwitham]

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.  

[RadioactiveWaste]

SO, we still don't know anything.

29 minutes ago, Elwood P Dowd said:

It doesnt realy matter how we got here, the £100k fine and the slap on the wrist are not the real issue here they are only a minor anoyance, its the outcome of the instruction to, submit restated accounts for financial years ending 30 June 2016, 2017 and 2018 that meet the requirements of FRS102, together with updated Profit & Sustainability calculations if necessary, that may come back to bite us

Although, in June we were issued  sanctions for not meeting standard FRS102 the real issue is the amortisation policy the club used in 30 June 2016, 2017 and 2018 accounts. Perhaps the EFL have been quite clever here in that they have used the Disciplinary Commission to open up and force the club to restate the accounts, probably in the hope we have breached FFP.

The Disciplinary Commission's findings in June only added to our issues with the EFL.

from June 2021

In May, an Independent League Arbitration Panel ruled that the Disciplinary Commission was wrong to dismiss the League’s expert accountancy evidence, which demonstrated that the Club’s policy regarding the amortisation of player registrations was contrary to standard accounting rules. 

More specifically, the panel determined that the Club’s policy was not in accordance with accounting standard FRS102 because it failed to accurately reflect the manner in which the Club takes the benefit of player registrations over the lifetime of a player’s contract. 

Tonight, the Disciplinary Commission has announced that the sanction to be imposed in respect of those breaches, is a financial penalty of £100,000 to be paid to the EFL and a reprimand for the Club as to its future conduct regarding the preparation of its Annual Accounts.

In addition, the Club has also been ordered to file restated accounts for financial years ending 30 June 2016, 2017 and 2018 that meet the requirements of FRS102, together with updated Profit & Sustainability calculations if necessary.

https://www.efl.com/news/2021/june/-Derby-county/

https://www.frc.org.uk/getattachment/69f7d814-c806-4ccc-b451-aba50d6e8de2/FRS-102-FRS-applicable-in-the-UK-and-Republic-of-Ireland-(March-2018).pdf

 

 

 

Thanks for this.

So, the upshot is the ammotisation policy used in 16,17,18 was ultimatly found to be not compliant, for which we were fined £100k AND ordered to redo the accounts.

This is logical - if the accounting policy is non-compliant then restating the accounts using a compliant policy is a logical outcome. It's also logical that the use of a non-compliant policy of itself is no more and no less than an accounting issue to be rectified, it does not prove anything beyond that. That's why a fine and being ordered to restate the accounts was the outcome and the EFL did not appeal it.

The newly restated accounts will then be the basis of a) a charge of we've breached allowable losses in those years, b) a charge on the basis our accounts are still non-compliant, or, c) an acceptance that we did not breach P&S rules.

a) We've lost more than allowable, we'll points deducted in line with the preceddent and the EFL will want to add extra for aggrivation.

b) I've a sneeky suspicion we may be in this situation as we've done something clever to meet the limits in the new accounts, hence the "constructive discussions" and "further information" - and at the moment the EFL are fine tooth combe looking for a way to charge us, and hopefully Steve Pearce has been actually clever, leading to outcome c

c) We all breath easty again and say what a waste of time and trashing of our club's reputation that was. Except Steve Gibson who will cry about his blue balls and how tony pulis was supposed to ensure promotion.

c)

 

 

 

[Spanish]

13 minutes ago, duncanjwitham said:

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.  

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

[RadioactiveWaste]

2 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

I read it as LAP did not want to set the punishment as there wasn't a clear precedent (i.e. did not want to set one) however DC2 could not alter the ruling of the LAP, DC2's only job was deciding the punishment and to be fair, DC2's outcome of fine+restate accounts is the logical one.

[Elwood P Dowd]

6 minutes ago, RadioactiveWaste said:

SO, we still don't know anything.

Thanks for this.

So, the upshot is the ammotisation policy used in 16,17,18 was ultimatly found to be not compliant, for which we were fined £100k AND ordered to redo the accounts.

This is logical - if the accounting policy is non-compliant then restating the accounts using a compliant policy is a logical outcome. It's also logical that the use of a non-compliant policy of itself is no more and no less than an accounting issue to be rectified, it does not prove anything beyond that. That's why a fine and being ordered to restate the accounts was the outcome and the EFL did not appeal it.

The newly restated accounts will then be the basis of a) a charge of we've breached allowable losses in those years, b) a charge on the basis our accounts are still non-compliant, or, c) an acceptance that we did not breach P&S rules.

a) We've lost more than allowable, we'll points deducted in line with the preceddent and the EFL will want to add extra for aggrivation.

b) I've a sneeky suspicion we may be in this situation as we've done something clever to meet the limits in the new accounts, hence the "constructive discussions" and "further information" - and at the moment the EFL are fine tooth combe looking for a way to charge us, and hopefully Steve Pearce has been actually clever, leading to outcome c

c) We all breath easty again and say what a waste of time and trashing of our club's reputation that was. Except Steve Gibson who will cry about his blue balls and how tony pulis was supposed to ensure promotion.

The bottom line is untill the accounts for financial years ending 30 June 2016, 2017 and 2018 meet the requirements of FRS102 and  have been reviewed by the EFL we are not going to know anything. Probably there are only two outcomes.

1. We have breached FFP in which case the EFL will deduct points from us 

2. We haven't breached FFP, this outcome will probably dissapoint the EFL again ?

 

6 minutes ago, RadioactiveWaste said:

 

 

 

 

[Elwood P Dowd]

1 minute ago, Elwood P Dowd said:

The bottom line is untill the accounts for financial years ending 30 June 2016, 2017 and 2018 meet the requirements of FRS102 and  have been reviewed by the EFL we are not going to know anything. Probably there are only two outcomes.

1. We have breached FFP in which case the EFL will deduct points from us 

2. We haven't breached FFP, this outcome will probably dissapoint the EFL again ?

 

 

 

[duncanjwitham]

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...

[RadioactiveWaste]

The bottom line is untill the accounts for financial years ending 30 June 2016, 2017 and 2018 meet the requirements of FRS102 and  have been reviewed by the EFL we are not going to know anything. Probably there are only two outcomes.

1. We have breached FFP in which case the EFL will deduct points from us 

2. We haven't breached FFP, this outcome will probably dissapoint the EFL again ?

I think this is the point of discussion between DCFC and the EFL, if it was 1. or 2. it'd be fairly quick to resolve, but, 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.

Once that's accepted by both parties, the rest becomes straightforward.

[RoyMac5]

If we paid our HMRC 'dues' would we come out of hard embargo if we assume the rest of the paperwork has been submitted but not yet ratified?

[cheron85]

2 hours ago, Gaspode said:

The EFL will need to review our submission and then determine whether we've met their requirements  - and if there is an agenda they will take some time doing that - expect an announcement on Septmber 1st.....

Does the review of the submission make any difference?

I thought the charges currently against us were for the failure to submit accounts - Not what the content of those accounts are

If we've submitted the accounts now they should be able to lift that from the charges

They then need to work out a separate, brand spanking new charge if the accounts are somehow in breach of rules don't they?

[duncanjwitham]

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.

[RadioactiveWaste]

3 minutes ago, cheron85 said:

Does the review of the submission make any difference?

I thought the charges currently against us were for the failure to submit accounts - Not what the content of those accounts are

If we've submitted the accounts now they should be able to lift that from the charges

They then need to work out a separate, brand spanking new charge if the accounts are somehow in breach of rules don't they?

We also need to submit accounts for 19,20 and pay HMRC. But any charge from the redone accounts redone accounts will be a brand new process, new DC, new LAP if the EFL (or us) don't like the outcome.

It's the ducking duracell or accountancy non-compliance issue

[RedSox]

 

Need to update the flow diagram.  Laters.

 

Edited August 26, 2021 by RedSox
Modification needed