What it means:

is that if you buy a player for £12m on a 4 year contract you would reduce that cost evenly over the life of the contract. So after 2 year you would show an asset on the balance sheet of £6m (with £3m going to your costs for each of those two years). If, however, you had reason to believe that nobody would ever pay you anything for him then to be prudent you would have to write off that £6m asset and put it straight to costs (rather than spread it over the remainder of the contract)

Posted By: mr carra on October 24th 2018 at 11:47:32

Message Thread

Any accounts experts out there. What does this mean: (NCFC) - Jim, Oct 24, 11:32:45
- Jim is no longer concerned (NCFC) - Henclrikus, Oct 24, 12:21:56
  - I am still concerned about our ability to compete long term but we are where we are (n/m) (NCFC) - Jim, Oct 24, 12:27:40
- To anyone reviewing the accounts, I wouldn’t get too excited about the detail such as this (NCFC) - SimonOTBC, Oct 24, 12:16:15
  - I concur... cash is the ligeblood of any business (n/m) (NCFC) - Worthing Yellow, Oct 24, 12:57:45
    - Lifeblood ffs (n/m) (NCFC) - Worthing Yellow, Oct 24, 12:57:56
      - I’ll let you off after your late night! (n/m) (NCFC) - SimonOTBC, Oct 24, 12:58:31
- Olive (n/m) (NCFC) - Ralf Scrampton, Oct 24, 12:00:26
- i think it still indicated we have tough times ahead (NCFC) - earlydoors, Oct 24, 11:54:13
  - If I read it right though we are still owed £42m for players (NCFC) - Jim, Oct 24, 12:01:07
    - Correct (NCFC) - mr carra, Oct 24, 12:15:53
- What it means: (NCFC) - mr carra, Oct 24, 11:47:32
  - Ok so do we think then this is basically Naismith, Jarvis and Martin and that (NCFC) - Jim, Oct 24, 12:02:30
    - Yes (NCFC) - mr carra, Oct 24, 12:10:22
      - Thanks - thats what i was thinking which is posiitve because unless i am (NCFC) - Jim, Oct 24, 12:16:31
        
        Reduced the accounting expense (NCFC) - SimonOTBC, Oct 24, 12:19:59
        
        For completeness, part of the £12m is non cash anyway though (NCFC) - SimonOTBC, Oct 24, 12:20:36
    - Other players I think because those guys would just depreciate normally, which would (NCFC) - Steve in Holland, Oct 24, 12:09:38
      - I doubt it’s oliveira and husband (NCFC) - SimonOTBC, Oct 24, 12:13:20
        
        Ah, am I correct in thinking that my incorrect thinking is because we are talking about (NCFC) - Steve in Holland, Oct 24, 12:16:40
        
        Yes that’s right (NCFC) - SimonOTBC, Oct 24, 12:24:58
    - It’s partly the write off of the value of transfer fees paid (NCFC) - SimonOTBC, Oct 24, 12:08:40
      - Thats what i'm getting at because doing the turnoever/wages figures its quite important (NCFC) - Jim, Oct 24, 12:14:58
        
        Yep (NCFC) - mr carra, Oct 24, 12:19:38
        
        or want to buy anyone new (n/m) (NCFC) - CWC, Oct 24, 12:36:09
        
        well presumably the current accounts include purchases of players... (NCFC) - mr carra, Oct 24, 12:53:07
        
        It takes the expense out of the income statement (NCFC) - SimonOTBC, Oct 24, 12:19:07
        
        I get that but you would assume that of the £42m to come in from player sales (NCFC) - Jim, Oct 24, 12:24:46
        
        I haven’t looked at the accounts (NCFC) - SimonOTBC, Oct 24, 12:26:09
        
        According to the accounts... (NCFC) - mr carra, Oct 24, 12:30:14
  - Switching CAPEX to OPEX then? (n/m) (NCFC) - Bungle, Oct 24, 11:49:51
    - It’s matching the p&l expense with the consumption of the asset (NCFC) - SimonOTBC, Oct 24, 11:58:54
    - Effectively, yes. (n/m) (NCFC) - mr carra, Oct 24, 11:53:24
- Jarvis maybe? (n/m) (NCFC) - Bungle, Oct 24, 11:40:36
  - Its a big sum though. Even if Jarvis is on £40K a week that £2m for his final year (n/m) (NCFC) - Jim, Oct 24, 11:41:50
- Naismith? (n/m) (NCFC) - SCC 28, Oct 24, 11:38:30
  - Yes (NCFC) - SimonOTBC, Oct 24, 11:42:10
  - I assumed it must include Jarvis. Is Nelson registered? Surely he is. (n/m) (NCFC) - Jim, Oct 24, 11:40:10

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