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Mr Popodopolous

Mr Popodopolous

Posted
Posted (edited)

Well G Star Ram, I probably shouldn't bother but going to address a few points very quickly and likely not in enough depth.

Audit and Accounting Experience

Vast experience clearly, doesn't mean you are necessarily objective however- let's be honest you appear to think Derby are innocent so...wouldn't expect you to be.

LAP vs IDC

As we recall, in the initial case which ended last August exonerated Derby in respect of the First Charge- Pride Park Sale and Leaseback, valuation etc, while mostly finding Derby innocent on the 2nd Charge except in terms of Disclosure. However from that, the EFL worked their way up to get a Guilty Verdict from the LAP. Incidentally I do trust their objectivity more than I would yours, as you are a Derby fan albeit as per your post, one with 23 years of Accounting and Auditing Experience and they are objective and Independent. Doubt you can say the same on this matter. When sent back to the IDC, it was £100k fine for Wrong Accounting, a Reprimand in respect of Future Financial Conduct and then the Restatement by 18th August.

Importance of Independent Witnesses

Unsure if it was ignorance or arrogance on the part of Mel Morris- but Independent Witnesses are quite important in cases such as this. Why did Derby not choose one or hire one for the matter in front of the League Arbitration Panel? It wouldn't surprise me if Professor Pope helped to tip the balance in favour of the EFL in that particular case. Justifiably so because the Auditors and Accountants on behalf of both Derby and the EFL are hardly going to be purely objective are they, in legal terms Independent Expert Witnesses are quite important- CPS explanation as to why: 

Quote

The Duty of an Expert Witness. The duty of an expert witness is to help the court to achieve the overriding objective by giving opinion which is objective and unbiased, in relation to matters within their expertise

Their words can carry weight- EFL hired one, Derby didn't for whatever reason. Wouldn't surprise me if it tipped the balance- and on balance I do think I believe the LAP, as there were some quite eminent names on it! Lord Dyson the most known, but also David Phillips QC and Charles Hollander QC are not exactly just starting out!

Could Derby not find one, or was there a belief on their part that one was not needed? My suspicion is that it helped to tip the balance, that extra objective Expert opinion.

Difference between Restatement for P&S and in general

Personally speaking, though it would be interesting, is it that important to Restate in terms of the past and overdue but especially the past Accounts due at CH? Restatement to the EFL/Disciplinary Process for P&S purposes however is required and that is what needs to happen by 18th August. I don't understand why e.g. the outstanding Accounts are not out now but with Internal Restatement for P&S purposes possible. There is some debate as to whether they specifically needed to wait for the Verdict as to the format for CH. Maybe they couldn't be bothered with the extra work that it might entail which I fully get, but a Restatement if it's just about a) Amortisation Schedules and b) Profit on Disposal of Players can be simple enough.

That said, given that there was no Sale guaranteed or lined up for players by the end of their Contract, how a Residual Value can be applied is questionable, IIRC Spanish made a good post on it back in May on the EFL Verdict thread. FFP/P&S=Straight Line or Straight Line with Extensions seems reasonable, for these purposes anyway IMO.

Impermissible under FRS 102. Haven't read it for a while but only permissible IIRC if an Active Market exists to do it that way- clearly not the case in this instance.

Bottom line is that a) EFL had an Independent Witness and Derby chose not to utilise one- probably helped to swing things- b) The LAP with some quite eminent individuals on it ruled it less than compliant.

Auditors in General

Number of Auditing Scandals in general in recent years, lax practice in the Industry etc- just because Smith Cooper and the Delves signed it off as aok doesn't necessarily mean it was entirely accurate?

Why don't I join DCFCFans and debate there?

Your Head of Pravda, sorry Admin, in Chief Dave the Rave certainly won't let that happen. Dissenting views...amusing how I found a post a little while ago that still blaming the EFL, Gibson and Kieran Maguire for your Clubs woes. Perhaps he should look a bit closer to home.

Found the post in q from David, the amount of blame and deflection is fairly incredible.

https://dcfcfans.uk/topic/37683-please-don’t-blame-morris-and-pearce/?tab=comments#comment-2143735

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Mr Popodopolous

Mr Popodopolous

Posted
Posted (edited)

On a general note, just looking back- not aimed at anyone in particular, it's interesting reading this thread from April 2019 that a quick search threw up and some of the blasé responses to the EFL and Derby issues...

https://dcfcfans.uk/topic/32065-trouble-ahead/

Wonder if they're pooh-poohing it now, some of the posters. Granted the OP was a tad wide of the mark in terms of the here and now but still it rumbles on in July 2021...

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Hxj

Hxj

Posted
Posted
On 21/07/2021 at 23:59, Mr Popodopolous said:

Auditors in General

Number of Auditing Scandals in general in recent years, lax practice in the Industry etc- just because Smith Cooper and the Delves signed it off as aok doesn't necessarily mean it was entirely accurate?

I think you missed the point from the LAP decision that it appeared that the club had misled the auditors too ....

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Mr Popodopolous

Mr Popodopolous

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£4,500 a week I believe...

As long as the cap on a) Wages and b) Number of allowable signings remains, they clearly have big problems.

EFL shouldn't budge an inch until they get what they want, save for an absolute bare minimum- they've signed 3, talk of Davies as a player-coach so 1 or maybe 2 max as it stands.

Some Derby fans say it's bad for the EFL but is it?

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Mr Popodopolous

Mr Popodopolous

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Also amusing to read elsewhere some Derby fans querying whether or querying the rent and whether they can lift the charging order on the ground.

I hope MSD and their lawyers are all over the 2nd bit...a debt is a debt, especially secured.

I also query the rent- £1.1m per season on an £81.1m Transaction is very much known as what professionals might call, a piss take. For a reminder of context:

  1. Reading paid £750k per season on a £26.5m transaction, rising to £1.5m on a £36.5m further sale.
  2. Birmingham pay £1.25m per season on a £22.6m transaction.
  3. Aston Villa pay- though I have to question the lease length, £2.6m on a £56.7m transaction.
  4. Sheffield Wednesday pay well it's opaque but it's maybe somewhere between £2.5-3m per season on a £60m transaction.

The Derby way, once again...EFL need to pile in on this too.

image.png.ca1ee584141aedcaf3f850b4cc8a2499.png

Derby's own hired valuers assessed the Market Rent at £4.16m per year...

However...

The 100 days a year bit.

image.png.10028c29b9c8fec5260797c8434684c6.png

??

image.png.e7f31eea11e0ce7a96586f6c4b66edb7.png

"100 days a year" vs "without there being any restriction on the number of days for which the Club would have access to Pride Park for football purposes".

image.png.8bdb721988d6c97f46cd3ccdd4314104.png

The market rent is consistently from their valuer, £4.16m per annum regardless of method it seems.

Few bits and bobs...is it merely the Club or would there be additional rent in the companies such as Club DCFC and Stadia DCFC that feed into the consolidated ie Sevco 5112/Gellaw Newco 203?

ie on the Club specific Accounts it might show £1.1m per annum, but adding these in...

If not that, would it/should it eat into Commercial Revenue that otherwise goes to the club? @AnotherDerbyFan seemed to suggest it a while ago.

If not, then the EFL need to pile in and if necessary, draw up fresh charges about this matter.

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Mr Popodopolous

Mr Popodopolous

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Looks like Dirtbag Derby were trying to flout it yet again in 2019. Hope the EFL are fully aware given Mel still in charge, not watched or followed it in great depth but assume some of these know a bit.

Saw debt write off on takeover mentioned.

https://dcfcfans.uk/topic/37983-al-jezeera-the-men-who-sell-football-morris-on-tape-offering-to-sell-to-mr-x/?tab=comments#comment-2173919

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Mr Popodopolous

Mr Popodopolous

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I think we'll survive, it won't be great though doubtless some good games. Big caveat there is injuries- if we have a shitload of injuries like last year then we're in major trouble- in fact we've had a fair few injuries for a number of seasons but last time was off the charts.

Think we have too many young players too soon in and around the first team squad- though Scott in particular has looked good and 2 goals for Janneh feels promising albeit very early days with both at this level.

Feel we need 2-3 in if possible, loanees or cut price signings...

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Mr Popodopolous

Mr Popodopolous

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https://dcfcfans.uk/topic/38022-filing-our-accounts/

Arrogant bunch I have to say, much like Mel, much like Rooney moaning again today that he needs help.

I made a bit of a vow thatI'd stop citing them but some of them still don't get a year post the Written Reasons of the 1st case that the Consolidated not the Club Accounts are what would be used for P&S purposes.

image.png.a20979c86fdf89091a96a1b68cf7387e.png

In theory could they be sanctioned to 2017? ie 2014/15, 2015/16, 2016/17? Restatement would have a knock-on effect as far as the last 2 goes as the Amortisation policy was amended in 2015/16 and the first applicable period for P&S as per the EFL site was 2014/15, 2015/16 and 2016/17, unless it's badly worded.

The £30m addition seems sketchy to me, they argue that there is up to another £30m in Profit on Pride Park due to hit the Accounts but that feels very much like Cake and eat it territory- seen Accountant Derby fans on Twitter question its inclusion etc.

The Stadium was held at Valuation under DRC until 2016 if not 2017 then suddenly flipped to Cost- but could be something about cherry-picking under FRS 102 if one asset type only.

They also seem not to discuss compliance to 2019 and the joint 2020 and 2021 period plus possibly even to this season in theory? It keeps on and on, headroom can be lost and gained.

https://stevecollings.co.uk/property-valuations-under-frs-102-and-frs-105/

If Kieran Maguire's interpretation of the £30m or up to that figure was right, then it is tied to the Revaluation Reserve from a 2008 Revaluation but...under FFP/P&S there is no provision stated for such a Reserve Transfer and inclusion within the calcs.

image.png.7af4bfb909b5deef4c01993f27f1406f.png

Maybe the possible improvement could be the difference between historical depreciation at cost and at revalued between 2008 and when this stopped being stated in 2015...but it ain't £30m! £8-10m maybe, could that be subtracted from the Proceeds - Carrying Value and added to it by reducing carrying value in 2018 at time of sale to add a bit more to Profit on Disposal?

Still sketchy however because there was a clear arrangement...£74.4m agreed between Club and EFL in 2018 for DRC and £81.1m under the Profits Method. Profit on Disposal was agreed and adjusted respectively for P&S purposes...and Revaluation Reserve to Profit is dicy unless reversing a prior downward Revaluation or Impairment.

Interested in @Hxj @Coppello thoughts on this...seems awfully opportunist IMO.

PPS, the Revaluation Reserve bumped up the number on Tangible Assets while still sitting visible- was £39m or thereabouts in 2008 but we also saw the value rise to £55m via it and some removal of Depreciation said same year.

image.png.a87316e59de2c3ac8f0230514b6bc685.png

image.thumb.png.79d1d8d3c2c9c84df953c18e8d1af2b6.png

The corresponding bump up following Revaluation.

image.thumb.png.92b113c9bfce6e4cbe426a3ec0b65964.png

Lastly included within Reserves and stated as such.

image.png.8863adb81259bde6138db0bcc1bfe644.png

Could well be cake and eat it territory.

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Mr Popodopolous

Mr Popodopolous

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Posted

I'll row back a bit, slated some of the fans when I first read the Thread but maybe not that warranted.

However I reiterate and stand by the following:

1) Mel Morris has a gross sense of entitlement, believes the rules are window dressing or something.

2) Rooney's bleating is a laugh. Or unwarranted anyway, he complained in a Press Conference about 'needing help' as he often does.

Newsflash, the Club have pushed the boundaries and still not giving the EFL what they want, hence these are the consequences. Suck it up.

3) A lot of DCFC fans still seem to blame the EFL. Hard to understand really and this erodes my sympathy that those who say people should have for the fans when inadequate ownership takes hold. Hence I don't have much.

4) £30m. It's arguable, it seems very sketchy.

5) I may have been hasty on criticising the Amortisation bit. Straight line with extensions also feels acceptable. Believe Clubs definitely utilise this.

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Hxj

Hxj

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Posted
22 hours ago, Mr Popodopolous said:

Interested in @Hxj @Coppello thoughts on this...seems awfully opportunist IMO.

The issue will boil down to how much DCFC can alter the accounts previously submitted on resubmission.

The FRS 102 accounts (2016 onwards) are on a 'Revaluation Basis' which is entirely acceptable, as would accounts on a 'Cost Basis'.  What I am unsure of is how compliant the accounts would be if on resubmission, the basis was changed from a 'Revaluation Basis' to a 'Cost Basis'. hence releasing the additional profit.

This will only effect the periods to 2018, 2019 and 2020 plus 2021.

There is also the issue relating to the rent paid, as mentioned in the original DC decision.

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Mr Popodopolous

Mr Popodopolous

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FRS 102 states that Accounting Policies must be applied consistently etc. To switch at an apparently convenient time...well.

That aside, the situation gets a bit odd. They appear to have signed Jagielka and Baldock until Jan- the latter as Kazim-Richards out for some time I believe.

The oddity however is that Sky asked the EFL about Derby's Transfer status on Saturday or so I read.

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Hxj

Hxj

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Posted
7 minutes ago, Mr Popodopolous said:

FRS 102 states that Accounting Policies must be applied consistently etc. To switch at an apparently convenient time...well.

Sadly, by some god given co-incidence, 2016 was the first accounting period that Derby adopted FRS 102 so there is no history of adoption of any policy ... oh and I was in error above the actual adjustment is made on adoption of FRS 102 which was in 2016.

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Mr Popodopolous

Mr Popodopolous

Posted
Posted (edited)
18 minutes ago, Hxj said:

Sadly, by some god given co-incidence, 2016 was the first accounting period that Derby adopted FRS 102 so there is no history of adoption of any policy ... oh and I was in error above the actual adjustment is made on adoption of FRS 102 which was in 2016.

Ah was it?? Still sounds debatable FFP wise, plus no provision for Reserve Transfers contained within the FFP Regs. No provision against either.

I've not looked at 2008-2018 in a great deal of depth for a while but when they Revalued in 2008 it showed the Revaluation Reserve on the Balance Sheet but also it enhanced the Valuation by an equal amount. Double Counting a possibility?

They appear to be proposing knocking up to £30m off the 2018 Carrying Value however which is a total absurdity.

Proceeds-Carrying Value-Revaluation Reserve=Enhanced Profit on Disposal?

IIRC, was a transfer to Retained Earnings? Even with that though Retained Earnings still negative, Cherrypicking maybe...as in picking out one favourable section.

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