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The Championship FFP Thread (Merged)


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 Hi @AnAstonVillafan

Cheating is an emotive and loaded term but there's a difference between blatant and subtle cheating. Exceeding limits knowingly during a 46 game season and then selling a stadium 10 days before Accounting Reporting Period ends has a feeling of unfinished business to me, at least from the perspective of other clubs and the EFL.

Not least post Parry, post Bury. The precedent set by reopening cases with respect to Derby and Sheffield Wednesday.

This fixed asset business is a loophole that EFL (I'm looking at Harvey) should have twigged and closes back in 2016 or 2017 at the latest.

Should've had a standardised amortisation method too or had in rules that they reserve the right to judge it all straight line and adjust for FFP purposes where necessary.

Riaz can speak for himself but any thoughts on the technical points? 

1) The method of payment for Villa Park. Loans Receivable and it appears to have slightly differing terms- NSWE Stadium Limited sheds a bit of light. 

2) Cash flow and payments. Nothing in the cash flow statement for Aston Villa Limited or NSWE UK. Not a deal breaker or clinching factor in itself but raises eyebrows. 

3) The valuation. We have no idea what method was chosen, indeed we don't for any of the stadium transactions. There clearly are multiple ways in which such an asset can be valued but the EFL have their own criteria.

Pride Park is a useful reference point- Derby's apparent independent valuation £81.1m, EFL's was £49-50m.  That's a significant and material divergence.

4) Exceptional Operating Income. Now the EFL as the I understand it are meant to be judging these applications for all clubs on a case by case basis for FFP purposes in real time. The year of the Projected Accounts perhaps though it be retrospective as well. It's HS2?

Well the issue I have is that Exceptional Operating Income appears x 2 for the same issue. Exceptional surely means significant hence a one off.

Clearly was recurring so I think there is a case to be made for exclusion of the second batch for FFP purposes if nothing else. 

5) Projected Accounts. Now this bit is very interesting. As fans we have no idea what goes in. I can't speak for other clubs but I do recall talk of a £60m loss from 22nd March 2019. Projected Accounts- and at this time time you were on a bit of a charge but in no way guaranteed promotion.

As such, promotion bonuses would surely not have been in there. Neither would the Xia payment in the event of promotion quite likely. However I reckon the HS2 may well have been and other issues would broadly have stacked up. 

This suggests to me and the sums would stack up, that your stadium sale was not in there as per March 1st submission of Projected Accounts.

Given the Xia and promotion payments would automatically have been I believe excluded anyway, this suggests that the stadium sale was decided after the submission of these Projected Accounts at start of March of the existing season, that all Championship clubs do.

A basic reading of the regs shows that 2 seasons of real accounts and one of Projected Accounts if exceeding limits is a basis for punishment or a Disciplinary Commission there and then!! 

Interested indeed in your thoughts.

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13 minutes ago, Mr Popodopolous said:

 Hi @AnAstonVillafan

Cheating is an emotive and loaded term but there's a difference between blatant and subtle cheating. Exceeding limits knowingly during a 46 game season and then selling a stadium 10 days before Accounting Reporting Period ends has a feeling of unfinished business to me, at least from the perspective of other clubs and the EFL.

Not least post Parry, post Bury. The precedent set by reopening cases with respect to Derby and Sheffield Wednesday.

This fixed asset business is a loophole that EFL (I'm looking at Harvey) should have twigged and closes back in 2016 or 2017 at the latest.

Should've had a standardised amortisation method too or had in rules that they reserve the right to judge it all straight line and adjust for FFP purposes where necessary.

Riaz can speak for himself but any thoughts on the technical points? 

1) The method of payment for Villa Park. Loans Receivable and it appears to have slightly differing terms- NSWE Stadium Limited sheds a bit of light. 

2) Cash flow and payments. Nothing in the cash flow statement for Aston Villa Limited or NSWE UK. Not a deal breaker or clinching factor in itself but raises eyebrows. 

3) The valuation. We have no idea what method was chosen, indeed we don't for any of the stadium transactions. There clearly are multiple ways in which such an asset can be valued but the EFL have their own criteria.

Pride Park is a useful reference point- Derby's apparent independent valuation £81.1m, EFL's was £49-50m.  That's a significant and material divergence.

4) Exceptional Operating Income. Now the EFL as the I understand it are meant to be judging these applications for all clubs on a case by case basis for FFP purposes in real time. The year of the Projected Accounts perhaps though it be retrospective as well. It's HS2?

Well the issue I have is that Exceptional Operating Income appears x 2 for the same issue. Exceptional surely means significant hence a one off.

Clearly was recurring so I think there is a case to be made for exclusion of the second batch for FFP purposes if nothing else. 

5) Projected Accounts. Now this bit is very interesting. As fans we have no idea what goes in. I can't speak for other clubs but I do recall talk of a £60m loss from 22nd March 2019. Projected Accounts- and at this time time you were on a bit of a charge but in no way guaranteed promotion.

As such, promotion bonuses would surely not have been in there. Neither would the Xia payment in the event of promotion quite likely. However I reckon the HS2 may well have been and other issues would broadly have stacked up. 

This suggests to me and the sums would stack up, that your stadium sale was not in there as per March 1st submission of Projected Accounts.

Given the Xia and promotion payments would automatically have been I believe excluded anyway, this suggests that the stadium sale was decided after the submission of these Projected Accounts at start of March of the existing season, that all Championship clubs do.

A basic reading of the regs shows that 2 seasons of real accounts and one of Projected Accounts if exceeding limits is a basis for punishment or a Disciplinary Commission there and then!! 

Interested indeed in your thoughts.

I wouldn't want to be in Mrs Popodopolous's shoe if she overspends on the household budget!  :)

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On 24/06/2020 at 17:29, Mr Popodopolous said:

In the article two very interesting bits.

Thankfully from Reading's perspective Financial Fair Play is being waved by the authorities this year so they can breathe a sigh of relief - temporarily at least.

Waved- waived surely? Makes my first doubt kick in.

To summaries, Reading Live have apparently beaten all other media outlets in the world or the UK anyway- reliable journos who deliver FFP news that perhaps shouldn't be in the public domain e.g. Matt Hughes, Matt Lawton, John Percy- David Conn as well, though these other areas.

These small nuggets contained within an article, to the news about FFP in the Championship?? Strange times indeed! :yes:

 

Hmmm...😉.

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Posted (edited)
12 hours ago, Mr Popodopolous said:

There is but one factor for Derby I had kind of overlooked.

I wonder if, the stadium sale- not only was to cover the losses on release but maybe was to cover Impairment of Player Registrations over a number of years. Because unlike Impairment of Tangible Fixed Assets, these quite rightly count towards the FFP loss. If the EFL's valuation of Pride Park indeed was £49-50m, this blows a huge hole in it.

I suppose my point on Impairment thinking about things further, was that if they Impaired in say 2018/19 and some in 2019/20, they could release with a residual value of £0 and no loss on release shown on the balance sheet, Profit and loss, or Intangible Assets section, and the stadium sale profit would cushion this blow in 2018/19 and 2019/20 if they stayed down.

This would make the accounts look more orthodox, on a quick reading- no great loss on Intangible Assets who have been released as it's already been accounted for through Impairment. By Intangible Assets I specifically mean Player Registrations or whatever the exact term is- Impairment on Intangible Assets excluding these isn't included within (I don't think) FFP calcs, whereas obviously and correctly Impairment of Player Registrations is!

Didn't reckon on the £31-32m downward valuation using the EFL's own criteria...

It's just a theory but I wonder if it might have some merit...?

On this note, I don't get why the EFL cannot run more than one case concurrently it seems, with the Sheffield Wednesday hearing still ongoing.

Edited by Mr Popodopolous
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Posted (edited)

I've refreshed my memories on the shifting categorisation and valuation or cost of Villa Park in the last few years. Doing a bit of a deep dive.

In 2014/15, it appeared to be bundled under Tangible Fixed Asset though no certainty either way.

I am looking at the Aston Villa Limited accounts here. Villa Park was listed as the selling party in the transaction I believe, even though NSWE UK/Recon Group and before that Reform Acquisitions Limited the prior overall group company.

In 2015/16, as per Delta, Vila Park was classified as an Investment Property. Investment Property is held or in the books at fair value. It contained Villa Park, the hotel and possibly some other buildings- but certainly recall Villa Park and the Hotel being mentioned. Strangely in 2015/16, this was stated as if in the 2014/15 accounts on the Balance Sheet despite not appearing as such in the prior accounts but no matter. Separated out, reclassified whatever- these were at Fair Value in May 2016. Now I'm confused about why Villa Park, the hotel and possibly some other buildings were apparently classified as this but anyway?

As per the FAIR VALUE of the Investment Property in May 2016, this was perhaps net of Impairment in total £36,804,318. Before Impairment- this reduced it to £34,203,227 as there was an Impairment in the year of £2,601,091.

As per your own Accounting Policy for Investment Property that season:

Quote

Investment Property

Properties held by the Company rentals or for capital appreciation are accounted for as Investment Properties. An Investment Property is initially recognised at cost and then measured at fair value at each accounting period with the movement being taken to the profit and loss account.

Well was at Fair Value so I can only assume they were doing it right. Fair Value though is the price to sell in an arms length transaction etc.

Same policy the following season, for Investment Property. No change, Fair Value remains the same.

Then it gets odd.

Suddenly it seems reclassified from Investment Property to Tangible Fixed Assets. This is in the Aston Villa Limited accounts to May 31st 2018.

Quote

Prior Year Adjustment

During the year, the company amended its accounting policy for the value of the investment property owned by the parent and let within the group from revaluation model to cost model, to be classified as Tangible Fixed Assets following the adoption of the Amendments to FRS 102 - Trienniel Review 2017. The impact of this change in Accounting Policy is to decrease the net book value of Investment Property, decrease Profit for the financial year ending 31 May 2017, and decrease opening reserves by £1,339,791.

Reading that Trienniel Review, I also came across the following:

Quote

Section 5 Statement of Comprehensive Income and Income Statement

Items to include and exclude from operating profit Clarification that should an entity choose to disclose operating profit, any profit / loss on the sale of property, plant and equipment, investment property and intangible assets should be included, and any profit / loss on the disposal of a discontinued operation should be excluded from such a measur

Makes me wonder about the Exceptional Operating Income (which appeared twice) being included in the main income statement- by which I mean HS2. That is operating profit though and tbh it was listed separately but for FFP...

https://www.frc.org.uk/getattachment/fad30eea-aa8f-4961-beda-a7d8128e3165/FS-01-FRS-102-Triennial-Review-2017-(Dec-2018).pdf

https://www.frc.org.uk/getattachment/de3cb6ac-e4d8-4086-91b0-ab32d081ec7f/FS-02-FRS-102-Transition-to-TR2017-Amendments-(Dec-2018).pdf
 

Quote

2) use the historical cost of the property, and depreciate/impair the asset as if it had always been carried at cost.

An entity has a free choice but the availability of information and the work required to determine the carrying value at the transition date, prior year end and current year end may lead an entity to take the transitional exemption for ease.

Not even looked at the NSWE UK accounts for a while yet. Is worth noting though that the NSWE Stadium Limited was apparently a shell company under the control, at the least the immediate control of Aston Villa Limited until 16th May 2019 as per CH, on which date the Owners took control. Was also named Recon Football Limited until 13th May 2019- was called Aston Villa Limited until 23rd March 2019.

There was evidence of switch around of the same names between different companies within the group during the Championship years. If you look at the naming history, certainly switching between Recon Football Limited, Recon Sports Limited, Aston Villa Limited...I'm wondering why...?

This is clearly a way to get cash in circumventing the equity limits via the backdoor. For me anyway. Could it even have been a debt write off by the back door- because we're to believe that a shell company suddenly has £56.7m in loans to give to a heavily loss making football club in exchange for Villa Park. Or could it be that the football club is supposed to have loaned £56.7m to NSWE Stadium Limited in exchange for Villa Park- again laughable within FFP?

Under Lease Receivables, this shows no less than 1 year £2.6m, Later than 1 and not later than 5 years, £7.8m.

As we can see that's 4 or maybe even 5 years rent of £10.4m for a £56.7m transaction.

Aston Villa are and maybe innocent at this point in time but there are to me serious, serious questions to answer on return I'd say.

You spend £56.7m and rent in Lease Receivables shown is due to come to £10.4m! Doesn't seem wildly commercial to me...?

Indeed, if it is for longer it should be disclosed, surely!

FRS 102 states that:

Quote

A lessee shall make the following disclosures for operating leases:

(a) the total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

(i) not later than one year;

(ii) later than one year and not later than five years; and

(iii) later than five years

This last one appears to be an issue.

Derby's sale and leaseback shows it beyond 5 years. Well below market rate but nonetheless it shows it.

Reading's too- first below market rate arguably, 2nd maybe less so- but it shows beyond 5 years.

Birmingham's actually looks quite commercial and is well beyond 5 years, shows it quite transparently.

Sheffield Wednesday's is the most opaque of all but enough about them for now...

@Davefevs @Riaz and @Coppello Surely Aston Villa can't be in the clear if they return or when they return?

Edited by Mr Popodopolous
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Posted (edited)

The arrogance of some of their online idiots- read this on a Tweet when looking up some quick Championship FFP news:

Quote

"If we learned 1 thing from last time it was that the championship is fun for a brief visit, but it is no place for Aston Villa to reside. Not just an existential threat, an affront to the proud history of the club. We should do all we can to never go back there again"

Somewhat of a gobshite- and that's being kind. I really hope that not only due to the spending and still for me open questions over the methods used, that because of jokers like this Tweeter the powers that be at the EFL find a way to make charges stick, find something and they get absolutely rinsed.
 
Social media and the Internet in fairness can amplify the idiots- but they seem to have an abundance?
 
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Posted (edited)

More significantly, Derby's accounts (with all the associated companies I listed higher up the thread!) are out or should be out on 30th June 2020- they took the 3 month extension due to Covid 19, football club accounts often a few days late so anyway...

Don't ask me why, it's just a hunch but I wonder if they have sold the training ground to appear in their 2018/19 accounts- I say sold you know what I mean, sale and leaseback. 

I just cannot help but wonder... 👀

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Posted (edited)

https://www.owlstalk.co.uk/forums/topic/290502-breaking-look-north-reporting-some-players-not-being-paid-in-full-this-month/

Interesting...during a tribunal over financial chicanery/mismanagement/incompetence at that.

👀

Likely an error but at the same time, there were reports of it last November too.

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Posted (edited)

One has been released, two in fact!

Gellaw Newco 202 Limited- the company who purchased the ground. So too has Gellaw Newco 204 Limited.

Gellaw Newco 204 Limited has total exemption full accounts so literally nothing to see there. Given it is dormant it is exempt from audit too, doesn't list anything especially interesting that I can see- not from an FFP perspective anyway.

Gellaw Newco 202 Limited has a bit more. Pride Park is classified as an Investment Property.

Shows the price paid- £81,109,232- maybe that's a slight uptick but seems to state it at Fair Value in any case- Mel Morris's take on Fair Value anyway! 

Quote

"The fair value of the investment property has been entered at cost in this the year of acquisition".

No profit and loss account of course, as companies entitled. Shows Profit and loss reserves of £2,700 and as this is year 1, this perhaps might be it? 

Well still awaiting the rest, doesn't really tell us anything much! Club DCFC Limited, DCFC Stadia Limited, The Derby County Academy Limited, The Derby County Football Club Limited- plus seemingly the bigger companies in the form of Sevco 5112 Limited and Gellaw Newco 203 Limited will be instructive- or should be!

Hmm. There also appears to be a charge over Pride Park maybe? Either way, the charge is from last year and may have changed but Henry Gabay is the controlling party of Rams Investment Limited, and Rams Investment Limited would be the person/persons entitled on early reading. Am sure there was a second company involved with Derby controlled by Gabay too.

https://beta.companieshouse.gov.uk/company/11422836/charges

Quote

Persons entitled

  • Rams Investment Limited

Brief description

Land known as derby county stadium, pride park, derby, DE24…

👀

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21 hours ago, Mr Popodopolous said:

 Hi @AnAstonVillafan

Cheating is an emotive and loaded term but there's a difference between blatant and subtle cheating. Exceeding limits knowingly during a 46 game season and then selling a stadium 10 days before Accounting Reporting Period ends has a feeling of unfinished business to me, at least from the perspective of other clubs and the EFL.

Not least post Parry, post Bury. The precedent set by reopening cases with respect to Derby and Sheffield Wednesday.

This fixed asset business is a loophole that EFL (I'm looking at Harvey) should have twigged and closes back in 2016 or 2017 at the latest.

Should've had a standardised amortisation method too or had in rules that they reserve the right to judge it all straight line and adjust for FFP purposes where necessary.

Riaz can speak for himself but any thoughts on the technical points? 

1) The method of payment for Villa Park. Loans Receivable and it appears to have slightly differing terms- NSWE Stadium Limited sheds a bit of light. 

2) Cash flow and payments. Nothing in the cash flow statement for Aston Villa Limited or NSWE UK. Not a deal breaker or clinching factor in itself but raises eyebrows. 

3) The valuation. We have no idea what method was chosen, indeed we don't for any of the stadium transactions. There clearly are multiple ways in which such an asset can be valued but the EFL have their own criteria.

Pride Park is a useful reference point- Derby's apparent independent valuation £81.1m, EFL's was £49-50m.  That's a significant and material divergence.

4) Exceptional Operating Income. Now the EFL as the I understand it are meant to be judging these applications for all clubs on a case by case basis for FFP purposes in real time. The year of the Projected Accounts perhaps though it be retrospective as well. It's HS2?

Well the issue I have is that Exceptional Operating Income appears x 2 for the same issue. Exceptional surely means significant hence a one off.

Clearly was recurring so I think there is a case to be made for exclusion of the second batch for FFP purposes if nothing else. 

5) Projected Accounts. Now this bit is very interesting. As fans we have no idea what goes in. I can't speak for other clubs but I do recall talk of a £60m loss from 22nd March 2019. Projected Accounts- and at this time time you were on a bit of a charge but in no way guaranteed promotion.

As such, promotion bonuses would surely not have been in there. Neither would the Xia payment in the event of promotion quite likely. However I reckon the HS2 may well have been and other issues would broadly have stacked up. 

This suggests to me and the sums would stack up, that your stadium sale was not in there as per March 1st submission of Projected Accounts.

Given the Xia and promotion payments would automatically have been I believe excluded anyway, this suggests that the stadium sale was decided after the submission of these Projected Accounts at start of March of the existing season, that all Championship clubs do.

A basic reading of the regs shows that 2 seasons of real accounts and one of Projected Accounts if exceeding limits is a basis for punishment or a Disciplinary Commission there and then!! 

Interested indeed in your thoughts.


You say unfinished business, but was selling our stadium illegal ?,
(I dont like it). Yes the EFL should have had a standardised
method, but thats not our fault.

Method of payment ? Seems acceptable to me. In the past
we've seen clubs convert loans to equity, write debts off
sponsor themselves, etc.

Cash flow ? I see no issue here, I know that recently NSWE put
money in for working capital.

What is your issue with the valuation exactly ? Too high ?
Too low ? I cant comment on the method, it may have differed.
How do you put a price on a football stadium ? Aston Villa owns
Villa Park, and some large plots of land around it. Some of that land
was sought after by developers. Some of it was sold off a few years back.
I've seen fans of other clubs try to compare the value of VP to
to other stadiums saying it was overvalued because of it's age, and some Villa fans say its
undervalued due to its historic significance. All conjecture.

Many dont consider its design, upgrades, surrounding area, transport links or size.

Consider also that less than a mile away there are major building projects
in progress to deliver the 2022 Commonweath Games. Could this affect the value
of Aston Villa's property assets ?

Other things you have mentioned is guess work. I knew about the Dr Xia's promotion payment from
when Dr Xia first took over. He has hidden a lot of details and
been very unclear about many things. But he was upfront in saying
that we would incur losses in an attempt to get promoted.
Many opposing fans feel resentment that we brought players in, but we lost a few too.

HS2 ? we invested heavily in Bodymoor 14 years ago and i feel
the compensation is fair. The way the clubs books are filed has differed
every time we've had a chage of ownership. They are very good at hiding
debts and wage bills.

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12 hours ago, Mr Popodopolous said:

The arrogance of some of their online idiots- read this on a Tweet when looking up some quick Championship FFP news:

Somewhat of a gobshite- and that's being kind. I really hope that not only due to the spending and still for me open questions over the methods used, that because of jokers like this Tweeter the powers that be at the EFL find a way to make charges stick, find something and they get absolutely rinsed.
 
Social media and the Internet in fairness can amplify the idiots- but they seem to have an abundance?
 

What is the problem with our spending ?

You do realise that we had to spend ? in 2015 we lost a 20 goal a season striker, and our best midfielder and best defender.
We HAD to spend.
In 2016 after relegation we lost 14 players.

We HAD to spend. Little choice. Even last summer we spent £130m approx in fixed fees, but we were down to 12 first team players (2 of whom were injured). So we had to spend to build up the squad.

As for what my fellow Villa fan says, we do have a proud history. We were Premier League for 27 years before relegation and won two trophies in that time. Villa Park ifself is a tribute to that heritage. There is nothing wrong in celebrating that. It is very difficult for a Villa fan to see their local rivals such as Wolves or Leicester develop past them after decades of being top dogs in the area.

11 years ago, we were in the quarter-finals of Europe, beat Ajax, Arsenal and finished comfortably in front of Man City and Spurs. Anyone older than mid 40s remembers major honours. For these people our transition to a yo-yo club is a very bitter pill to swallow and FFP to them is merely a way of keeping the top six at the top. 

Even I who accepts and understands whats happening to us feels outraged at the current predicament. We've fallen a long way.

Imagine if Bristol City fell into League Two while the Gas and Forest Green developed past you or even got into Premier League ? 

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Posted (edited)
On 01/07/2020 at 12:40, AnAstonVillafan said:

What is the problem with our spending ?

You do realise that we had to spend ? in 2015 we lost a 20 goal a season striker, and our best midfielder and best defender.
We HAD to spend.
In 2016 after relegation we lost 14 players.

We HAD to spend. Little choice. Even last summer we spent £130m approx in fixed fees, but we were down to 12 first team players (2 of whom were injured). So we had to spend to build up the squad.

As for what my fellow Villa fan says, we do have a proud history. We were Premier League for 27 years before relegation and won two trophies in that time. Villa Park ifself is a tribute to that heritage. There is nothing wrong in celebrating that. It is very difficult for a Villa fan to see their local rivals such as Wolves or Leicester develop past them after decades of being top dogs in the area.

11 years ago, we were in the quarter-finals of Europe, beat Ajax, Arsenal and finished comfortably in front of Man City and Spurs. Anyone older than mid 40s remembers major honours. For these people our transition to a yo-yo club is a very bitter pill to swallow and FFP to them is merely a way of keeping the top six at the top. 

Even I who accepts and understands whats happening to us feels outraged at the current predicament. We've fallen a long way.

Imagine if Bristol City fell into League Two while the Gas and Forest Green developed past you or even got into Premier League ? 

I'll return to your first post tomorrow or later or similar- the arrogance of some tweets though can be quite apparent but I guess all clubs have it.

We lost a 20 goal a season striker, an attacking LB/LM and though perhaps not our technically best defender, he was for a time in that season our leader, our talisman- Reid, Bryan and Flint. The versatility of the first two as well was a real boon- and a promising squad player who split opinion, but I think he had something in Magnússon.

Quite a few from May 2019-January 2020 as well. I digress though- that is life in the Championship, trading- Brentford are brilliant at it!

Fair enough after relegation and I get that aspect- you had to spend big owing to out of contract.

You certainly have a proud history and I can understand that- but clubs are where they are on merit, a lot of the time. "No place to reside", "an affront". I mean, come off it!

Yeah fair point- I even remember as a neutral although under 40 you being top 6 under O'Neill, recall you pushing 

The thing is though, history is quite fantastic for clubs- but it's that in a way too, history. AC Milan have won 7- yes, seven- European Cups/CLs. Where are they now! Upper midtable in Serie A, perpetually rebuilding and got a settlement 1 Year UEFA ban for FFP that's where!

Game changes, it is or can be cyclical too. Not so long ago, ie < a decade that your neighbours won a trophy, now look at them- lower midtable in the 2nd tier and run by idiots! ;) Could say the same about many historically clubs who are not what they were. Have you as a club underutilised academy and some signings too- Westwood PL with Burnley upper midtable, Ayew midtable with Crystal Palace, Albrighton title winner with Leicester, Stevens top 7/8 with Sheffield United on their surge from League One. They're not stellar players but they are all doing a good job IMO. Gollini probably didn't get a proper chance either with Atalanta? 4th in Serie A and CL qf with Atalanta, not too bad in a pretty small/modest sized club?

Yeah I get that.

Edited by Mr Popodopolous
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Posted (edited)

Apparently, according to OwlsOnline, the site of Hillsborough is worth >£60m in land...

Quote

If we sold the land we own there at Hillsborough we would get more than £60M 

Unsure about that...?

Reason I return to this thread is that there are rumours doing the round about a verdict in this- and possibly the Derby- but certainly this case.

Talking of Derby, still no sign of their accounts.

Not for the club, not for Club DCFC Limited, not for Stadia DCFC Limited, not for Derby County Academy, not for the holding company of the last 3- Sevco 5112- and the ultimate one, Gellaw Newco 203 Limited.

The charge over Pride Park might be of interest though- not least as Henry Gabay, the ultimate owner of Rams Investment Limited aka the lender, has been arrested and could face 15 years in the nick in Germany if guilty!?

Also worth noting that though similarly named, Gellaw Newco 202 Limitred and Gellaw Newco 204 Limited are not directly part of the group- though all ultimately owned by Mel Morris.

While I'm on the general theme of FFP, sale and leaseback of stadia etc, one thing I don't quite get is if a club sells a stadium but leases it back obviously, how does it then put matchday revenue, but especially commercial revenue generated by the ground in its accounts in subsequent years? Surely that is risk and reward and flows, or should flow, to the purchaser? Or does a market rent negate it!

Simplest terms, Hillsborough makes an average of £5m say in matchday revenue over a season- Sheffield Wednesday have sold it to Chansiri through Sheffield 3 Limited, which was controlled by Sheffield 4 Limited, which was wound up and replaced by Sheffield 5 Limited- could all ultimately be controlled by SWFC Holdings Limited based in Hong Kong, but privately owned- not listed.

Surely that money should flow in subsequent years to Sheffield 3 Limited, perhaps Sheffield 5 Limited, maybe at a push SWFC Holdings Limited based in Hong Kong- but not Sheffield Wednesday FC! Point I am missing here?

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7 hours ago, Mr Popodopolous said:

Apparently, according to OwlsOnline, the site of Hillsborough is worth >£60m in land...

Unsure about that...?

Reason I return to this thread is that there are rumours doing the round about a verdict in this- and possibly the Derby- but certainly this case.

Talking of Derby, still no sign of their accounts.

Not for the club, not for Club DCFC Limited, not for Stadia DCFC Limited, not for Derby County Academy, not for the holding company of the last 3- Sevco 5112- and the ultimate one, Gellaw Newco 203 Limited.

The charge over Pride Park might be of interest though- not least as Henry Gabay, the ultimate owner of Rams Investment Limited aka the lender, has been arrested and could face 15 years in the nick in Germany if guilty!?

Also worth noting that though similarly named, Gellaw Newco 202 Limitred and Gellaw Newco 204 Limited are not directly part of the group- though all ultimately owned by Mel Morris.

While I'm on the general theme of FFP, sale and leaseback of stadia etc, one thing I don't quite get is if a club sells a stadium but leases it back obviously, how does it then put matchday revenue, but especially commercial revenue generated by the ground in its accounts in subsequent years? Surely that is risk and reward and flows, or should flow, to the purchaser? Or does a market rent negate it!

Simplest terms, Hillsborough makes an average of £5m say in matchday revenue over a season- Sheffield Wednesday have sold it to Chansiri through Sheffield 3 Limited, which was controlled by Sheffield 4 Limited, which was wound up and replaced by Sheffield 5 Limited- could all ultimately be controlled by SWFC Holdings Limited based in Hong Kong, but privately owned- not listed.

Surely that money should flow in subsequent years to Sheffield 3 Limited, perhaps Sheffield 5 Limited, maybe at a push SWFC Holdings Limited based in Hong Kong- but not Sheffield Wednesday FC! Point I am missing here?

I wondered the same when the stadium sale issue first surfaced. 

I'm guessing the "tenanancy agreement" includes a clause that allows the tenant to enjoy the benefit of commercial income generated from the use of the stadium buy the tenant. 

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7 hours ago, Mr Popodopolous said:

Talking of Derby, still no sign of their accounts.

Not for the club, not for Club DCFC Limited, not for Stadia DCFC Limited, not for Derby County Academy, not for the holding company of the last 3- Sevco 5112- and the ultimate one, Gellaw Newco 203 Limited.

The charge over Pride Park might be of interest though- not least as Henry Gabay, the ultimate owner of Rams Investment Limited aka the lender, has been arrested and could face 15 years in the nick in Germany if guilty!?

Also worth noting that though similarly named, Gellaw Newco 202 Limitred and Gellaw Newco 204 Limited are not directly part of the group- though all ultimately owned by Mel Morris.

 

Talking of Derby, it is amazing how skilled they are at arranging funding from honest sources.

The company has been funded after the end of the accounting period by Rams Investment Limited, a company where a certain Swiss gentleman Mr Henry Gabay is the beneficial owner.

This also popped up this week: https://www.bloomberg.com/news/articles/2020-07-02/duet-ceo-gabay-appears-in-french-court-in-cum-ex-related-case.  Looks like the Germans want to lock him up!

 

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1 hour ago, downendcity said:

I wondered the same when the stadium sale issue first surfaced. 

I'm guessing the "tenanancy agreement" includes a clause that allows the tenant to enjoy the benefit of commercial income generated from the use of the stadium buy the tenant. 

Meant to add. 

Think of a retails shop. The shopkeeper rents the shop but keeps the revenue from goods he sells. 

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Posted (edited)
7 hours ago, Hxj said:

Talking of Derby, it is amazing how skilled they are at arranging funding from honest sources.

The company has been funded after the end of the accounting period by Rams Investment Limited, a company where a certain Swiss gentleman Mr Henry Gabay is the beneficial owner.

This also popped up this week: https://www.bloomberg.com/news/articles/2020-07-02/duet-ceo-gabay-appears-in-french-court-in-cum-ex-related-case.  Looks like the Germans want to lock him up!

 

Indeed. 

What happens to the charge over Pride Park if he did go to prison, I wonder.

Genuinely interested in @DerbyFan and @AnotherDerbyFan and their take if they still read this site. 

I wonder if the reason Mel Morris has seemingly been scrambling for investment is to try and pay down the charge over Pride Park,  a race against the clock.

Or maybe they desperately need promotion and promotion this season to achieve the same goal?

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8 hours ago, Mr Popodopolous said:

Indeed. 

What happens to the charge over Pride Park if he did go to prison, I wonder.

Genuinely interested in @DerbyFan and @AnotherDerbyFan and their take if they still read this site. 

I wonder if the reason Mel Morris has seemingly been scrambling for investment is to try and pay down the charge over Pride Park,  a race against the clock.

Or maybe they desperately need promotion and promotion this season to achieve the same goal?

Genuine question.. what does a ‘charge’ on the stadium actually mean?

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10 minutes ago, AnotherDerbyFan said:

Genuine question.. what does a ‘charge’ on the stadium actually mean?

It's like your own mortgage.

You borrow from the mortgage company and in return grant them  a charge on your home,  so that if you default in maintaining your payments or are unable to repay the money borrowed at the end of the borrowing period,  the lender can take possession of  your property and sell it in order to recover what they are owed.

Im guessing in this case Morris has borrowed money and offered a charge on Pride Park as security. It sounds like the loan is coming up for repayment and that Morris has been trying to arrange alternative finance to repay the loan and clear the charge. If he can't, and Morris cannot repay the loan when it falls due, then the lender could require Pride Park to be sold in order to recoup what is owed, which could be embarrassing.

Not to worry though, as Pride Park is worth £60m so plenty there to pay off what is owed with change! :) 

 

 

 

 

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Posted (edited)
46 minutes ago, AnotherDerbyFan said:

Genuine question.. what does a ‘charge’ on the stadium actually mean?

I'm actually not altogether sure- charge over the stadium perhaps? May not have the right wording! :whistle:

I was hoping Kieran Maguire might write about it to be fair- maybe it's common in business and I am trying to make sense of it myself- hoping you might know! 😆

From a look, it appears that Gellaw Newco 202 Limited- the company that purchased Pride Park of course, might have borrowed the money off Gabay through the company Rams Investment Limited.

Gellaw Newco 204 Limited appears to be listed as the controlling party of Gellaw Newco 202 Limited.

It would appear, though perhaps things have changed and it hasn't come through on Companies House yet, so I can only go on those docs, but it would appear that, well it says the following:

Quote

(1) Gellaw Newco 202 Limited (As Chargor)

-and-

(2) Rams Investment Limited (As Lender)

My fairly loose interpretation as that is Pride Park would appear to be collateral/security for the purchase price, and that Rams Investment Limited as put this up.

I have a feeling that the rent may flow to Gabay's company and not Gellaw Newco 202 Limited, as there is nothing in the latter- or Gellaw Newco 204 Limited- about rent, Operating leases, lease receivables etc.

Maybe Mel Morris is the guarantor, I don't know for sure.

Edit: @downendcity better than me on this one! Sounds like Mel Morris may have gambled here?

To add, as he said- seeking out finances to pay it down- maybe he has gambled on promotion this season?? Could that be possible- PL money would pay it down for sure.

Get the impression you might be interested in this one @Davefevs despite the big City news tonight!

A little bit of further digging, FWIW, suggests that Pride Park is stated/listed as an Asset of Community Value. Or was, in September 2017.

https://www.derby.gov.uk/media/derbycitycouncil/contentassets/documents/excel/DerbyCityCouncil_List_of_assests_of_community_value_september_2017.pdf

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The charge itself doesn’t concern me, although that may be down to not fully understanding the purpose of it. I’m sure some more details will eventually come out.

It’s certainly not a last throw of the dice and a gamble on promotion. I’d say the last real gamble was the Rowett season. We failed, and the message since then has very clearly been to slash the wage bill and give the kids a shot. It’s part of the reason why Rowett jumped ship when he did.

Mel’s stated aim is for the starting lineup to be 50% academy on a consistent basis. You can’t have that aim and also have an immediate target of promotion at all costs. I doubt many clubs are using academy graduates as much as we are. Yesterday, 4 started, 2 came on and another stayed on the bench (plus 1 U23 signing). 5 started the Preston game with 1 remaining on the bench (plus 2 U23 signings).

Financially, we’re finally past the mess caused from the transfers in 2015 and 2016. We’re in a much more sustainable position with estimates suggesting the wage bill is now equal to our income, with room to improve that further without weakening the first team squad. Transfers funded by outgoings - Bielik’s fee more or less equal to what we received for Lampard (and his team), Thomas to Barnsley and Delap to Man City. 

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49 minutes ago, AnotherDerbyFan said:

The charge itself doesn’t concern me, although that may be down to not fully understanding the purpose of it. I’m sure some more details will eventually come out.

It’s certainly not a last throw of the dice and a gamble on promotion. I’d say the last real gamble was the Rowett season. We failed, and the message since then has very clearly been to slash the wage bill and give the kids a shot. It’s part of the reason why Rowett jumped ship when he did.

Mel’s stated aim is for the starting lineup to be 50% academy on a consistent basis. You can’t have that aim and also have an immediate target of promotion at all costs. I doubt many clubs are using academy graduates as much as we are. Yesterday, 4 started, 2 came on and another stayed on the bench (plus 1 U23 signing). 5 started the Preston game with 1 remaining on the bench (plus 2 U23 signings).

Financially, we’re finally past the mess caused from the transfers in 2015 and 2016. We’re in a much more sustainable position with estimates suggesting the wage bill is now equal to our income, with room to improve that further without weakening the first team squad. Transfers funded by outgoings - Bielik’s fee more or less equal to what we received for Lampard (and his team), Thomas to Barnsley and Delap to Man City. 

When the "sale" of Pride Park came to light, Morris is o record as saying that the club was looking at sustainability and bringing young players through. To be fair, I doubt he really had any other option, given that he could only sell the stadium once and knew he wouldn't be able to wriggle out of ffp issues a second time.

A charge is pretty standard business practice - I suspect many clubs have a charge in place with regards to their bank borrowing/overdraft, and it only becomes a problem if the club defaults in maintaining interest payments or a loan term comes to an end and cannot repay the borrowing.

 

 

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Posted (edited)

I'll believe it when I see it but a few might be interested in this- appears to be Reluctantnicko's response to an Aston Villa fan...wonder what's on the cards?

👀

@chinapig @Davefevs @downendcity @Coppello

"Need to hope FFP rules are relaxed a bit"...  👀 🤔

Might also be interested thinking about it, @The Gasbuster @Vincent Vega @Ska Junkie

Lest we forget after all, in May 2019 they were under a soft embargo, but then started spending as soon as it hit June 6th/7th. See Jota. Makes me wonder- they eventually spent £100m + that summer under the PL jurisdiction! @havanatopia may also be interested/have theories.

Edited by Mr Popodopolous
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4 hours ago, Mr Popodopolous said:

I'll believe it when I see it but a few might be interested in this- appears to be Reluctantnicko's response to an Aston Villa fan...wonder what's on the cards?

👀

@chinapig @Davefevs @downendcity @Coppello

"Need to hope FFP rules are relaxed a bit"...  👀 🤔

Might also be interested thinking about it, @The Gasbuster @Vincent Vega @Ska Junkie

Lest we forget after all, in May 2019 they were under a soft embargo, but then started spending as soon as it hit June 6th/7th. See Jota. Makes me wonder- they eventually spent £100m + that summer under the PL jurisdiction! @havanatopia may also be interested/have theories.

Last minute takeover one season, pandemic the next. They like flirting with danger thats for sure.

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1 hour ago, Vincent Vega said:

Last minute takeover one season, pandemic the next. They like flirting with danger thats for sure.

Relegation is looming. We will sell players, some for more than what we paid for them.

And we will aquire players too. Nothing unusual here.

I think we will be in good shape.

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10 hours ago, Mr Popodopolous said:

I'll believe it when I see it but a few might be interested in this- appears to be Reluctantnicko's response to an Aston Villa fan...wonder what's on the cards?

👀

@chinapig @Davefevs @downendcity @Coppello

"Need to hope FFP rules are relaxed a bit"...  👀 🤔

Might also be interested thinking about it, @The Gasbuster @Vincent Vega @Ska Junkie

Lest we forget after all, in May 2019 they were under a soft embargo, but then started spending as soon as it hit June 6th/7th. See Jota. Makes me wonder- they eventually spent £100m + that summer under the PL jurisdiction! @havanatopia may also be interested/have theories.

I don’t think they’ll be in trouble because they have saleable assets.

⬇️⬇️⬇️

3 hours ago, AnAstonVillafan said:

Relegation is looming. We will sell players, some for more than what we paid for them.

And we will aquire players too. Nothing unusual here.

I think we will be in good shape.

Agree, but your issue will be replacing them with the quality required.  I don’t see Villa assembling a squad of the same quality as last season (Abraham, Mings, etc).  Can imagine John Terry might go too.  We will then see how good Dean Smith is, and whether he can handle “names”.  I’m only speculating, but I can imagine Terry bring pretty key in that player to staff dynamic.

Having said that, none of us know how covid will impact things.  You probably won’t get top dollar, but you don’t have to pay it out either.

The pressure will be on, as you’ll only get 2 years worth of PPs.

Interesting times ahead though.

I do hope you get relegated though....sorry!

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Posted (edited)
14 hours ago, Davefevs said:

I don’t think they’ll be in trouble because they have saleable assets.

⬇️⬇️⬇️

Agree, but your issue will be replacing them with the quality required.  I don’t see Villa assembling a squad of the same quality as last season (Abraham, Mings, etc).  Can imagine John Terry might go too.  We will then see how good Dean Smith is, and whether he can handle “names”.  I’m only speculating, but I can imagine Terry bring pretty key in that player to staff dynamic.

Having said that, none of us know how covid will impact things.  You probably won’t get top dollar, but you don’t have to pay it out either.

The pressure will be on, as you’ll only get 2 years worth of PPs.

Interesting times ahead though.

I do hope you get relegated though....sorry!

You could well be right- and absolutely agree, pressure on, uncertain market- etc. Bit of pressure on Smith.

I was thinking might the EFL reopen the case to May 2019 though? If it's the standard 3 year rolling period chances are fine- but I still have to wonder if there aren't unsettled issues from 2016-17 to 2018-19 for Aston Villa...they were quite happy to do so in the case of both Derby and Sheffield Wednesday after all.

Right with you on the last bolded line!

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Posted (edited)

With all the clubs but especially those with valuations north of £50m- we know who they are- this bit feels interesting.

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

58/404 up the top for a start, Page 54-55 down the bottom- the Appendix to Section 2, Fair Value Measurement

Quote

No active market

2A.4 The fair value of an asset that does not have a quoted market price in an active market is reliably measurable if:

(a) the variability in the range of reasonable fair value estimates is not significant for that asset; or

(b) the probabilities of the various estimates within the range can be reasonably assessed and used in estimating fair value.

2A.5 There are many situations in which the variability in the range of reasonable fair value estimates of assets that do not have a quoted market price is likely not to be significant. Normally it is possible to estimate the fair value of an asset that an entity has acquired from an outside party. However, if the range of reasonable fair value estimates is significant and the probabilities of the various estimates cannot be reasonably assessed, an entity is precluded from measuring the asset at fair value.

2A.6 If a reliable measure of fair value is no longer available for an asset measured at fair value, its carrying amount at the last date the asset was reliably measurable becomes its new cost. The entity shall measure the asset at this cost amount less impairment, if any, until a reliable measure of fair value becomes available.

It's not an active market as we all know. Absolutely not an active market, the purchase and sale of a football stadium- let alone the sale and leaseback element (though seemingly becoming increasingly common in one League in particular ;) )

Quote

£20m- Elland Road

£22.76m- St Andrews

£26.5m Madjeski Stadium

£37.5m- Madjeski Stadium a year on! 😕

£56.7m- Villa Park

£60m- Hillsborough

£81.1m- Pride Park

Erm, anyone?? Ranges? I don't have the precise sale price for Elland Road actually but think it was a bit above, or a bit below valuation...

The Elland Road one tbh was a sale from property developer to Andrea Radrizzanni- more of an arms length transaction between two different parties- yet some of those towards the top end in particular??

Bolded bit number 3, suggests football stadia may well be one!

On the last bit, always the question of how it got from a valuation under depreciated replacement cost- by it I mean Hillsborough- of £22.25m to £60m in 2019 or was it 2018 when it was sold!

Aston Villa I don't even know where to start!

Derby, interestingly perhaps, the bulk of the difference appears to be the difference between the revaluation reserve being included and not. If you subtract that from the EFL's perceived valuation the difference will be very little. As in Pride Park apparent value-RR=EFL valuation, pretty much.

Looking a bit further on, I'm surprised there was zero, zip, nil, nada- disclosure for the reasoning behind Sheffield Wednesday shifting their reporting period to 14 months. It appears to be a required disclosure?

Quote

Frequency of reporting

3.10

An entity shall present a complete set of financial statements (including comparative information as set out in paragraph 3.14) at least annually. When the end of an entity’s reporting period changes and the annual financial statements are presented for a period longer or shorter than one year, the entity shall disclose the following:

(a) that fact;

(b) the reason for using a longer or shorter period; and

(c) the fact that comparative amounts presented in the financial statements (including the related notes) are not entirely comparable.

Certainly saw no evidence of (b) or (c) in particular, which is interesting. Not sure of how you'd present (a) so I assume they did that?

Oh yeah, forgot this bit- applicable to all surely!

Quote

Valuation technique

2A.2 Valuation techniques include using the price in a binding sale agreement and recent arm’s length market transactions for an identical asset between knowledgeable, willing parties, reference to the current fair value of another asset that is substantially the same as the asset being measured, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the asset and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the entity uses that technique.

2A.3 The objective of using a valuation technique is to establish what the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal business considerations. Fair value is estimated on the basis of the results of a valuation technique that makes maximum use of market inputs, and relies as little as possible on entity-determined inputs. A valuation technique would be expected to arrive at a reliable estimate of the fair value if:

(a) it reasonably reflects how the market could be expected to price the asset; and 54 FRS 102 (March 2018)

(b) the inputs to the valuation technique reasonably represent market expectations and measures of the risk return factors inherent in the asset.

I am assuming this is referring to, or applicable to Fixed asset transactions?

Maybe a)? Unsure how many of the criteria in b) are applicable here! Would the market really give most of these clubs these deals- look at a) The price and b) The rent (as far as we know thusfar) for in particular in alphabetical order, Hillsborough, Pride Park and Villa Park!

With respect to Aston Villa, I'm struggling on HS2 revenue and classification. This feels an interesting fit, perhaps correct:

Quote

5.10B Extraordinary items are material items possessing a high degree of abnormality which arise from events or transactions that fall outside the ordinary activities of the reporting entity and which are not expected to recur. The additional line items required to be presented by paragraph 5.9 and material items required to be disclosed by paragraph 5.9A, are not extraordinary items when they arise from the ordinary activities of the entity. Extraordinary items do not include prior period items merely because they relate to a prior period.

Would we/could we class HS2 revenue as exceptional or extraordinary? Good case for it IMO!

Not expected to recur is a bit tricky given it followed in successive seasons?! 🙃 Even if it's not bad accounting, it's dubious the 2nd lot for FFP I'd suggest.

Quote

Subsequent measurement

17.15 An entity shall measure all items of property, plant and equipment after initial recognition using the cost model (in accordance with paragraph 17.15A) or the revaluation model (in accordance with paragraphs 17.15B to 17.15F). Where the revaluation model is selected, this shall be applied to all items of property, plant and equipment in the same class of asset (ie having a similar nature, function or use in the business). An entity shall recognise the costs of day-to-day servicing of an item of property, plant and equipment in profit or loss in the period in which the costs are incurred.

Cost model

17.15A Under the cost model, an entity shall measure an item of property, plant and equipment at cost less any accumulated depreciation and any accumulated impairment losses.

Revaluation model

17.15B Under the revaluation model, an item of property, plant and equipment whose fair value can be measured reliably shall be carried at a revalued amount, being its fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.

17.15C The fair value of land and buildings is usually determined from market-based evidence by appraisal that is normally undertaken by professionally qualified valuers. The fair value of items of plant and equipment is usually their market value determined by appraisal. The Appendix to Section 2 Concepts and Pervasive Principles provides further guidance on determining fair value.

17.15D If there is no market-based evidence of fair value because of the specialised nature of the item of property, plant and equipment and the item is rarely sold, except as part of a continuing business, an entity may need to estimate fair value using an income or a depreciated replacement cost approach.

Reporting gains and losses on revaluations

17.15E If an asset’s carrying amount is increased as a result of a revaluation, the increase shall be recognised in other comprehensive income and accumulated in equity. However, the increase shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. 152 FRS 102 (March 2018)

17.15F The decrease of an asset’s carrying amount as a result of a revaluation shall be recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity, in respect of that asset. If a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.

Madjeski Stadium, St Andrews and Villa Park appeared to be at cost. Stated at cost- though some odd moving between categories on the last one.

Hillsborough was periodically revalued using depreciated replacement cost- this seemed to change to cost in 2015/16. Pride Park the same, except a year later. Sheffield Wednesday appeared to be doing this until 2013/14, the last stated and disclosed valuation, methodology etc- pre Chansiri. Derby is a bit sketchier.

That's the thing, the DRC did not differ all that much- it stayed within certain ranges, as 17.15B just suggests so to surge to £60m in a few seasons is a bit off the charts, no!?

DRC was definitely applicable ion the last two- yet saw some remarkable rises! Especially Hillsborough, from February 2014 DRC=£22.25m to £60m sale price!

For Aston Villa, here comes a question mark that I've touched on before many times but now I have the actual definition and such...

Quote

Impairment

Impairment Recognition and measurement of impairment

17.24 At each reporting date, an entity shall apply Section 27 Impairment of Assets to determine whether an item or group of items of property, plant and equipment is impaired and, if so, how to recognise and measure the impairment loss. That section explains when and how an entity reviews the carrying amount of its assets, how it determines the recoverable amount of an asset, and when it recognises or reverses an impairment loss.

Impairment is when the carrying amount of an asset exceeds the recoverable amount.

In 2015/16, it is pretty likely Aston Villa Impaired Villa Park. 

A definition of Impairment appears to be as follows:

Quote

"The recoverable amount of an asset is the greater of its 'fair value less costs to sell' and its 'value in use'. To measure impairment, the asset's carrying amount is compared with its recoverable amount. The recoverable amount is determined for individual assets.

Recoverable amount less costs to sell...was there a reversal of Impairment? Imagine that, along with the original Impairment, would require some strict conditions.

In other words, either the value was fair but the carrying amount too low or the fair value was too high...in each case question marks over the profit size?

May look at more of this later in the week, see if there's other areas to be covered...definitely feels like a rigorous second look should occur however.

Possibly feels relevant too, the below link.

https://www.icaew.com/-/media/corporate/files/technical/financial-reporting/factsheets/uk-gaap/impairment-of-assets.ashx

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20 hours ago, Davefevs said:

I don’t think they’ll be in trouble because they have saleable assets.

⬇️⬇️⬇️

Agree, but your issue will be replacing them with the quality required.  I don’t see Villa assembling a squad of the same quality as last season (Abraham, Mings, etc).  Can imagine John Terry might go too.  We will then see how good Dean Smith is, and whether he can handle “names”.  I’m only speculating, but I can imagine Terry bring pretty key in that player to staff dynamic.

Having said that, none of us know how covid will impact things.  You probably won’t get top dollar, but you don’t have to pay it out either.

The pressure will be on, as you’ll only get 2 years worth of PPs.

Interesting times ahead though.

I do hope you get relegated though....sorry!

I don't believe FFP will be as much as a concern in the near future as it was in the past, due to Covid and the fact that our leadership is much more competent. The squad should be of good Championship standard, but a lot depends on what we can keep hold of. 

If we make say, £60m net on outgoing transfers i'd expect half of that figure to be available for new transfers. We could find ourselves without an experienced striker on the first team. That would not go unchecked. Personally I'm happy to return to the lower league as long as we have an astute plan for promotion - this would involve improvement on the training pitch as well as action in the transfer market.  Any team that gets relegated from the Championship will have get at least £110m TV revenue before any parachute money arrives (note that we have spent ours already)


I actually hope that Bristol City get the right manager in and sooner rather than later go up. I have nothing but good wishes for your club. I do find the antagonism towards Aston Villa slightly amusing.

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