NFFC Financial Talk

[JollyLolly]

The clue is in the wording Profit and Sustainability by PL clubs and should be the number one argument, Forest achieved both of these elements in acting the way they did so no issue! If it is indeed political to placate either the other PL clubs or the Government then this becomes an almighty and costly mess and will draw in and involve so many more interested parties.

[DR Forest]

The application of standard accounting practice (allowing income to be recognised in a period when it is reasonably foreseeable but has not yet crystallised) is more than just mitigation.

The only argument is whether the income (brennan) meets the standard for inclusion, not whether the PL unilaterally decide they don’t like it.

[wassy04]

The application of standard accounting practice (allowing income to be recognised in a period when it is reasonably foreseeable but has not yet crystallised) is more than just mitigation.

The only argument is whether the income (brennan) meets the standard for inclusion, not whether the PL unilaterally decide they don’t like it.

There's two points to this, firstly, if its not established practise for football clubs to do this as the precedent is long set that this isn't deemed acceptable to be included in accounts as you could easily argue it's not necessarily forseeable as there's no proof at the 30th June that we are intending to sell. In fact we also benefit from Brennan playing a few games which is hardly in the so called "Spriit of P&S".

Secondly, even if it is acceptable to include it in our accounts that's not what decides P&S, its the separate calcs and allowances like infrastracture. Our accounts will show a much higher loss than we're included for P&S. These rules have already been determined, so whether we legally include it in our accounts or not, if it's not allowable in those rules they can just add it back in.

For me, this all sounds very Derby, if that's the argument. Oh we're clever, we've found a loophole to get away with spending more, sounds very familiar to me. All this talk of financial standards is very similar to their arguments on the amortisation which eventually was deemed not to apply to football. 

If you're desperate to argue about the spirit of P&S, essentially selling a player in June to cover for the loss we've already made for the season gone is hardly in the spirit of it is it? We're essentially benefitting twice as we get the sale and we also got the full year of Brennan. To be in the spirit of it we should've had to sell him in January. This is irrelevant anyway but just wanted to put it out there.

[Jean_claude_killy]

Surely this will be a binary decision, either the PL have stated that this form of accounting is not allowed or they have missed it.

The comparison with Derby is not really like for like; they used an arcane method of amortisation hardly ever used and we have used accountancy practices used in every day accounting.

The PL may not see it like that and neither will some of the Clubs, however, the issue of third party sponsorship was not covered in the rules and that prompted a change.

[wassy04]

Surely this will be a binary decision, either the PL have stated that this form of accounting is not allowed or they have missed it.

The comparison with Derby is not really like for like; they used an arcane method of amortisation hardly ever used and we have used accountancy practices used in every day accounting.

The PL may not see it like that and neither will some of the Clubs, however, the issue of third party sponsorship was not covered in the rules and that prompted a change.

In some ways that's worse, if we're using something that's deemed a modern acceptable accounting practise, then why have no other team ever used this before in any form of accounting related to football up until now? 

This is why it's the same as Derby as we'd be trying to do something that is different to all previous precedent set on football accounting and not used by anyone else.

[Username]

I keep seeing the word ‘spirit’ but these are Rules not Guidelines. There is a distinct difference between the two.

Rules prescribe conduct.

Guidelines dictate principles and provide direction as to behaviour.

It’s a very important difference.

I do hope that a large point of our case doesn’t rest on this.

I do think Nick De Marco is a bit more cleverer than that and by all accounts the man is one of the best in his game and we should be quietly confident on the findings no matter what all the on screen pundits might think. They know absolutely F**K ALL.

There is really no such thing as the best in his game, that's all bluster.

Yes, he may be better versed than other KCs but ultimately the fundamentals of the case dictate the success or not.

[Salvatore Matrecano]

What is the same as Derby and every other club that has been deducted points previously, is that most fans are utterly convinced of their own club’s innocence.

[Username]

The clue is in the wording Profit and Sustainability by PL clubs and should be the number one argument, Forest achieved both of these elements in acting the way they did so no issue! If it is indeed political to placate either the other PL clubs or the Government then this becomes an almighty and costly mess and will draw in and involve so many more interested parties.

You might (misleadingly) state that the clue is in the wording but the facts are in the rules regardless.

[Sniffer Dog (Admin)]

What is the same as Derby and every other club that has been deducted points previously, is that most fans are utterly convinced of their own club’s innocence.

Most fans think with their hearts though Sal, it's what fans do.

[MacAwoniyi Cheese]

The application of standard accounting practice (allowing income to be recognised in a period when it is reasonably foreseeable but has not yet crystallised) is more than just mitigation.

The only argument is whether the income (brennan) meets the standard for inclusion, not whether the PL unilaterally decide they don’t like it.

Some interesting points...

I have an amendment though, after my own research last night, I have discovered that the Premier League use IFRS (International Financial Reporting Standards) See here Deloitte link not GAAP.

Within the IFRS, there is IAS 10 Events After the Reporting Period Boring detailed link here and here (The link Kieran Maguire cited)

So, in a nutshell:

1) The Premier League accepts IFRS Standards for preparation of accounts Link here Link where it references using IFRS standards.

2) IFRS Standards states... "the sale of inventories after the end of the reporting period may give evidence about their selling price at the end of the reporting period for the purpose of assessing impairment at that date.
Impairment in accountancy parlance is 'less than book price' or 'an impaired asset has a current market value that is less than the value listed on the balance sheet'.

3) Forest then may have a case for defending the decision of not selling Brennan for £30m as it would be an impaired asset, that being below the market value of £50m. This would then, in turn potentially be an 'event after the reporting period'.

This is all my own conjecture, so take with as much salt as needed; however, to my fairly mid-level accounting knowledge, it does have some credence.

[JollyLolly]

So why use the term Profit & Sustainability Username?

[wassy04]

The application of standard accounting practice (allowing income to be recognised in a period when it is reasonably foreseeable but has not yet crystallised) is more than just mitigation.

The only argument is whether the income (brennan) meets the standard for inclusion, not whether the PL unilaterally decide they don’t like it.

Some interesting points...

I have an amendment though, after my own research last night, I have discovered that the Premier League use IFRS (International Financial Reporting Standards) See here Deloitte link not GAAP.

Within the IFRS, there is IAS 10 Events After the Reporting Period Boring detailed link here and here (The link Kieran Maguire cited)

So, in a nutshell:

1) The Premier League accepts IFRS Standards for preparation of accounts Link here Link where it references using IFRS standards.

2) IFRS Standards states... "the sale of inventories after the end of the reporting period may give evidence about their selling price at the end of the reporting period for the purpose of assessing impairment at that date.
Impairment in accountancy parlance is 'less than book price' or 'an impaired asset has a current market value that is less than the value listed on the balance sheet'.

3) Forest then may have a case for defending the decision of not selling Brennan for £30m as it would be an impaired asset, that being below the market value of £50m. This would then, in turn potentially be an 'event after the reporting period'.

This is all my own conjecture, so take with as much salt as needed; however, to my fairly mid-level accounting knowledge, it does have some credence.

My point was that yes this might be a legit accounting practise however it's not something that's been used in football that I'm aware of. Therefore, we'd be doing something no other club has done. You're telling me no other club has considered this argument in the history of football?