Speculation The hysterical and annoying, but traditional, totally unfounded summer 2022 rumours thread

[Payne74]

We can pay off contracts if we want to - very expensive, but possible

Wouldn't paying them off also go on the books used for FFP ? Would only be beneficial if the payoff was for a lower % of the entire contract.
You could end up with a Jlingz scenario where a very average player like Perez has his contract paid off and then signs for free on a huge wage

 

[Miles Away]

Both Justin and Ricardo weren’t brilliant when they returned and played last season - Castagne was better than both of them, left or right hand side

Unless and until that changes (which it obviously might), selling him would weaken us, so would be pretty stupid, really

I agree.

 

[Jeff]

Would only be beneficial if the payoff was for a lower % of the entire contract.

What sometimes happens in a situation like this, when a player is told he's not wanted:

Player is told to find a new club.
Player gets an offer, but for less money than he's currently on.
Club agrees to terminate his contract, and they'll pay the difference between his old contract and his new one.

 

[Payne74]

What sometimes happens in a situation like this, when a player is told he's not wanted:

Player is told to find a new club.
Player gets an offer, but for less money than he's currently on.
Club agrees to terminate his contract, and they'll pay the difference between his old contract and his new one.

Lets hope none of our unwanted players go to Forest then...

 

[fitz]

I can't be arsed to check myself if it's the method used. But with player amortisation being by contract length?....Presumably could raise a few quid by extending a lot of duffers contracts by a few years?

 

[Blue Maniac]

I can't be arsed to check myself if it's the method used. But with player amortisation being by contract length?....Presumably could raise a few quid by extending a lot of duffers contracts by a few years?

I’ve always assumed it’s done this way but have no evidence for it.

 

[Biffa Bacon]

I can't be arsed to check myself if it's the method used. But with player amortisation being by contract length?....Presumably could raise a few quid by extending a lot of duffers contracts by a few years?

I think that club's have options about how they amortise contracts, Derby got in lots of trouble because they did it in a strange way but there are options about how you account for costs, football is a strange business

 

[FrenchFox]

Our problem is cash, not accounting conventions. I would assume that the accounting convention that applies to Football Clubs is the same as in any business. The asset is amortised over the period of usefulness of that asset. If a new player signs a 5 year contract for 50m, then the accounts would show a 10m hit each year on the P+L account. If your wage bill is too high, it would only be the disposal of those assets for a cash consideration that would help your financial situation. Companies go bust because they have run out of cash, not because they are not making a profit.

 

[fitz]

Our problem is cash, not accounting conventions. I would assume that the accounting convention that applies to Football Clubs is the same as in any business. The asset is amortised over the period of usefulness of that asset. If a new player signs a 5 year contract for 50m, then the accounts would show a 10m hit each year on the P+L account. If your wage bill is too high, it would only be the disposal of those assets for a cash consideration that would help your financial situation. Companies go bust because they have run out of cash, not because they are not making a profit.

It's the amortisation of the transfer fee that I'm on about. Tbh I'm not overly clued up on the methodology of football clubs because the accounts will be bollocks to fit the rules.

 

[fitz]

I think that club's have options about how they amortise contracts, Derby got in lots of trouble because they did it in a strange way but there are options about how you account for costs, football is a strange business

Business is a strange business

 

[Blue Maniac]

Our problem is cash, not accounting conventions. I would assume that the accounting convention that applies to Football Clubs is the same as in any business. The asset is amortised over the period of usefulness of that asset. If a new player signs a 5 year contract for 50m, then the accounts would show a 10m hit each year on the P+L account. If your wage bill is too high, it would only be the disposal of those assets for a cash consideration that would help your financial situation. Companies go bust because they have run out of cash, not because they are not making a profit.

I don’t think there’s any suggestion LCFC is going out of business though. I imagine fitz is thinking about FFP.

 

[fitz]

I don’t think there’s any suggestion LCFC is going out of business though. I imagine fitz is thinking about FFP.

Yup. Even though it doesn't really exist, i did mean FFP.

 

[FrenchFox]

It's the amortisation of the transfer fee that I'm on about. Tbh I'm not overly clued up on the methodology of football clubs because the accounts will be bollocks to fit the rules.

The interesting thing is that sometimes, you can make up your own rules. Many years ago, I sold an asset for 750k, which would have resulted in a large taxable capital gain. I changed our accounting rules so that I could treat much of our income as deferred income, coincidentally resulting in a 600k loss. This meant that I could keep all of the income from the sale of the asset in the business and pay no tax on the Capital Gain.

A few years later, when I sold the business, the Rottwiellers who came in to examine the books kept asking me where this income was. I had to tell them not to look where it was, but where it wasn't. It was not in the Income statement, but it was on the Balance sheet as a current liability. I so enjoyed that moment.

 

[fitz]

The interesting thing is that sometimes, you can make up your own rules. Many years ago, I sold an asset for 750k, which would have resulted in a large taxable capital gain. I changed our accounting rules so that I could treat much of our income as deferred income, coincidentally resulting in a 600k loss. This meant that I could keep all of the income from the sale of the asset in the business and pay no tax on the Capital Gain.

A few years later, when I sold the business, the Rottwiellers who came in to examine the books kept asking me where this income was. I had to tell them not to look where it was, but where it wasn't. It was not in the Income statement, but it was on the Balance sheet as a current liability. I so enjoyed that moment.

Trust me....i could write a book (well not really cos of my shite English) on how much people trying to read into accounts becomes pointless due to lack of like for like shit going on. That and as companies get bigger, the less experience their face to face auditors have. Could do a linear graph showing auditors' stage of puberty and a companies revenues. I used to work for Greggs and the auditors just accepted my dilapidations provision because they couldn't understand wtf I was explaining to them. It's no surprise the likes of tesco can accidentally (apparently) recognise the same revenue twice in one year, then have to reverse it all just in time for the new CEO/CFO to take plaudits for turning it around the following year.

 

[Biffa Bacon]

Trust me....i could write a book (well not really cos of my shite English) on how much people trying to read into accounts becomes pointless due to lack of like for like shit going on. That and as companies get bigger, the less experience their face to face auditors have. Could do a linear graph showing auditors' stage of puberty and a companies revenues. I used to work for Greggs and the auditors just accepted my dilapidations provision because they couldn't understand wtf I was explaining to them. It's no surprise the likes of tesco can accidentally (apparently) recognise the same revenue twice in one year, then have to reverse it all just in time for the new CEO/CFO to take plaudits for turning it around the following year.

In my experience auditors send the least experienced staff to do audits, they've just left university and are pretty credulous, just take them for a decent lunch and tell them everything is fine

 

[fitz]

In my experience auditors send the least experienced staff to do audits, they've just left university and are pretty credulous, just take them for a decent lunch and tell them everything is fine

Yep. It's definitely a system fit for purpose. Send the inexperienced kids to check that the people with 30 years accounts experience don't know the tricks. Depending on the size of the company being audited....some aren't even university graduate age.

 

[Payne74]

Trust me....i could write a book (well not really cos of my shite English) on how much people trying to read into accounts becomes pointless due to lack of like for like shit going on. That and as companies get bigger, the less experience their face to face auditors have. Could do a linear graph showing auditors' stage of puberty and a companies revenues. I used to work for Greggs and the auditors just accepted my dilapidations provision because they couldn't understand wtf I was explaining to them. It's no surprise the likes of tesco can accidentally (apparently) recognise the same revenue twice in one year, then have to reverse it all just in time for the new CEO/CFO to take plaudits for turning it around the following year.

I have no idea about accounting but my neighbour is an accountant and she one day explained to me how a coffee chain worked.
They open offices around the world depending on what they are buying and what the tax rate is for example the lowest tax country for Coffee beans think it was Switzerland so they open an office in Zurich and the whole chain buys all its beans from there even though obviously not one single bean go's there, that Zurich office charges extortionate fees for its beans to each shop, they open another office in say Holland that has the lowest tax for paper cups and then repeat the same process as with the beans, the shops never make any profit and operate at a loss so the tax liability is zero, all the profits are made in the countries that have whatsoever low tax for the products they buy.

The company I work for is DCC and it has its head office in Dublin, purely because it has the lowest corporation tax in Europe.
DCC buys its LPG from one of its companies in America at a huge inflated cost it ships it over to the UK and sells it almost at a loss, I'm not sure but I think its UK branch makes a loss each year but we all get profit related bonuses that go into thousands and the last tax year was our largest ever
I gave up trying to understand it but wished I'd gone into accounting when I was younger.

 

[Brown Nose]

 

[City Fan]

Not nice

 

[fitz]

We've got 2 number ones. Maybe they'd take the other one...