6 + 2 Point Deductions

[Goat]

Not suggesting Spurs are doing anything wrong but a question for some of you who clearly know more about accounting than me - if Spurs are depreciating 72m per year, but not paying that off the debt are they effectively able to boost their other spending allowance under psr?

What about the stadium debt, whilst not relevant to psr but can you depreciate an asset whilst still owing more than you depreciate?

Annual depreciation definition — AccountingTools

Annual depreciation is the standard yearly rate at which depreciation is charged to a fixed asset. This rate is consistent for the straight-line method.

www.accountingtools.com

Example of Annual Depreciation​

Coati Corporation owns a lathe that originally cost $10,000. The firm estimates that the lathe will have a useful life of 10 years, at which point it will have no salvage value. It plans to use straight-line depreciation, which means that it will incur annual depreciation of $1,000 in each of the next 10 years.


In short, I do not have a clue, but the above example might help somebody.

 

[twoblue]

Forest also won 4 points in that time, with Johnson scoring and assisting.

Yep there’s the rub.
I agree they shouldn’t have been forced to sell him early, but they played him in the interim period

 

[twoblue]

Erm, what?

Looks like a man you would have to explain the offside too

 

[pfim]

Not suggesting Spurs are doing anything wrong but a question for some of you who clearly know more about accounting than me - if Spurs are depreciating 72m per year, but not paying that off the debt are they effectively able to boost their other spending allowance under psr?

What about the stadium debt, whilst not relevant to psr but can you depreciate an asset whilst still owing more than you depreciate?

Depreciation is an expense on the income statement just like wages etc. Depreciation on a stadium is an excluded expense, wages are an included expense.

Debt is a liability on the balance sheet, a claim on assets. Irrelevant to PSR.

They do not move in tandem, they're two separate numbers.

 

[RomanReigns]

Rabinowitz got early disclosure of our latest accounts and legged it

 

[matty1878]

There's a few claims made that are jumbled together. Without reviewing Spurs' books I'll make a few brief responses here.

1. Stadium build costs are usually excluded from PSR; I don't know what Spurs books and PSR reviews look like, but this is the standard
2. We know that Levy was holding down operating costs when building NWHL (or whatever it's called); not sure if this was for the benefit of PSR, but less costs = PSR benefit
3. Everton were not charged on stadium costs, but loans used for stadium costs that were alleged inappropriately booked/reported; without getting into all of that again, it's not as though Everton have a different set of rules applied vs Spurs (*again, not getting into all of that)
4. All assets are depreciable, that's not anything new; depreciation begins from when the asset is purchased/built, etc; you can't depreciate construction, you depreciate what you own. there's not secret advantage or loophole here.
5. Not sure what old Everton accounts show, but once you depreciate an asset you can't depreciate it again; a 125 year old stadium has fully run out its deprecation; the Park End rebuild in 1994 for £1.3 million would have been depreciated over a fixed term, but those are likely to be the last depreciable* assets on the Everton accounts, lawnmowers notwithstanding

So to suggest that Spurs are exploiting a loophole is probably ignorance or maybe bias, but there's no actual evidence for this, even if you disagree with the PSR deductions held against Everton

*depreciable stadium assets, I'm sure the club has lots of depreciable assets

cheers matey

 

[Goat]

Rabinowitz got early disclosure of our latest accounts and legged it

"Everton posted a post-tax loss of £89.1 million ($112 million), more than double the £38.3 million loss it posted in 2021-22, indicating the growing scale of the club's financial woes."

 

[pfim]

Annual depreciation definition — AccountingTools

Annual depreciation is the standard yearly rate at which depreciation is charged to a fixed asset. This rate is consistent for the straight-line method.

www.accountingtools.com

Example of Annual Depreciation​

Coati Corporation owns a lathe that originally cost $10,000. The firm estimates that the lathe will have a useful life of 10 years, at which point it will have no salvage value. It plans to use straight-line depreciation, which means that it will incur annual depreciation of $1,000 in each of the next 10 years.


In short, I do not have a clue, but the above example might help somebody.

So you paid 60k for Coleman. This is an expense. You plan to use this Coleman over 5 years (its useful life), so instead of your expense being 60k now when you bought this Coleman, it is 12k per year for the next 5 years.

To account for this on the balance sheet, you now have an asset of 60k. This asset is reduced by 12k for each year you depreciate it until it is zero.

This is how you account for it. This has nothing to do with its actual value, you could sell in at the end of 5 years and it still has value...

This is amortisation and it's effectively the same as depreciation. Depreciation is used for tangible assets, amortisation used for intangible assets (the asset here isn't Coleman himself but his footballing rights).

 

[Goat]

So you paid 60k for Coleman. This is an expense. You plan to use this Coleman over 5 years (its useful life), so instead of your expense being 60k now when you bought this Coleman, it is 12k per year for the next 5 years.

To account for this on the balance sheet, you now have an asset of 60k. This asset is reduced by 12k for each year you depreciate it until it is zero.

This is how you account for it. This has nothing to do with its actual value, you could sell in at the end of 5 years and it still has value...

This is amortisation and it's effectively the same as depreciation. Depreciation is used for tangible assets, amortisation used for intangible assets (the asset here isn't Coleman himself but his footballing rights).

I understand it regarding players and when I say understand, we are talking like 2% understanding.

And I kind of understand it regarding a Stadium, even though Stadiums have slightly more life than a footballer.

It just seems quite high no?

 

[Tipp blue]

"Everton posted a post-tax loss of £89.1 million ($112 million), more than double the £38.3 million loss it posted in 2021-22, indicating the growing scale of the club's financial woes."

I can't figure out how?, we made a profit on player sales offloaded millions in salaries of deadwood.. yet still managed to lose 90 million. The incompetence is astonishing, unless most of that can be written off due to stadium/infrastructure costs then quite frankly we would deserve any deduction they see fit.

 

[Bebeto]

They're not claiming anything. They built a stadium and it had a value of 1 billion or whatever. That doesn't hit their Income statement, let alone the PSR calculation.

They expense the stadium over 40 years. That 40 years of expenses is added back to the PSR calculation.

There's no double counting, which I think it what you're suggesting.

They spent 1 billion on the stadium and it's not part of the calculation, full stop.

Was there not a rule change just when we started to build our stadium which has benefitted spurs?

 

[Goat]

I can't figure out how?, we made a profit on player sales offloaded millions in salaries of deadwood.. yet still managed to lose 90 million. The incompetence is astonishing, unless most of that can be written off due to stadium/infrastructure costs then quite frankly we would deserve any deduction they see fit.

I would imagine a massive chunk of that will be written off as Stadium related.

As to why and how.

 

[pfim]

I understand it regarding players and when I say understand, we are talking like 2% understanding.

And I kind of understand it regarding a Stadium, even though Stadiums have slightly more life than a footballer.

It just seems quite high no?

Same math, you just expect a building to last longer than a player.

I haven't looked at their financials, I assume the 72 million is more than just the stadium.

 

[pfim]

Was there not a rule change just when we started to build our stadium which has benefitted spurs?

Not that I'm aware of?

 

[Goat]

Same math, you just expect a building to last longer than a player.

I haven't looked at their financials, I assume the 72 million is more than just the stadium.

I had a read, but it might as well have been in mandarin.

https://www.tottenhamhotspur.com/media/v24hfkyo/tottenham-hotspur-limited-300623.pdf