Sterling for £49m? The Gamble and the Curse

[Sir X]

A you mi guh fi draw fah mi accounts brethren ,dem nuh know mi move wid certifieds Xperts....if im wah go amortirized mi will draw fi mi big fren Jangle .

That said players have compared their contracts to slavery,so I could be justified,technically.

Peter and Paul really need a class.

[Sir X]

Good lesson Peter,PJ & Rock.This is what Paul wants me to explain to ,esoteric terms to justify value added.Something wrong wid di bredda,mi look fool fi say mi know terms mi nuh know bout.

I can only use commonsense analysis/layman terms to pick sense outta nonsense.The bredda is an educated fool.Is this how you want me to approach RS bought for 600k and sold for 49 million,do the expenditure ,profit and loss,amoritization for me ,please mi a beg yuh

Thats why mi pay dem man deh fi handle mi business.

[Peter R]

You are failing to understand the concept... it has nothing to do with the market value of a player. His value is his value so if ManU pays y amount for the Barca keeper, that is his value. Barca will calculate for their books whether they made a gain or not on his sale, and they will then calculate it based on this formula:

Amount received from ManU - (Keepers original cost - total amount depreciated at selling date) = profit or loss.

I am making these numbers up but say Manu paid 20 million for him; barca would say, well we paid 10 for him, depreciated 8 so far, therefore ON THE BOOKS his value is 2... We get 20 so the profit is 18.

All this is Rocky is accounting concepts, and in accounting once everyone follows the same principles, apples and apples can always be compared. There is an organization called International Accounting Standards Board that I'm sure all accountants in the EU would follow so that eeryone is on the same page with respect to these things.

All I am trying to do here, is NOT justify anything, but to simply explain how the business accounting side of things wuld work.

[Sir X]

This is ridiculous guys ,and this is why I refuse to entertain Pauls bait to explain financial jargon as it relates to value added or lost ,appreciation, depreciation ,amoritization etc in a player valuation, am I going to ask anyone of you to explain the pharmacolgical dynamics of any drug to justify you using it ? or how you use it or why you use it ?

The conversation would get lost in translation ,wouldnt it be better to use laymans terms and keep it simple,takes a special sort of person to use professional jargon when the other party admits they have no degree in said topic ,and insists seeing that you admit as such ,you should be disregarded to participate in any discussion.Compare it to a medical profession assesing your understanding of the pharmodynamics of ,lasix,lanoxin or phenobarbital before he prescribes it for you,or if you know the pathology of gangrene before your toe gets amputated.

Now we are into Pauls red herring of how to asseses valuation in technical academic terms


That is the point and red herring of Pauls salvo ,and as mi say a common sense ting.Yuh buy cheap fi sell high -money spent -value added.

[Peter R]

If you say so re: Sterling and being categorized as a current asset, though I disagree. Somehow, I don't get the impression you read anything I wrote in reply to you.

However, as I said before, I am not an accountant, and the treatment of football players (in accounting terms) is not my area of expertise.

What I can tell you, because I am researching the topic, is that players are not considered Current or Fixed Assets, but an INTANGIBLE asset, the way a logo , patent or trademark is treated, and these latter are depreciable if they have a FINITE life, as I imagine a football player and his contract would be considered to have.

I will continue this after I do some more reading. I don't like to blow hot air just so!

[Sir X]

Given all that do you purchase that intangible asset to add value to your club,if so how?

[Jangle]

well done...depreciate it very much Peter R

Dwl. Unuh funny sah

[Rockman]

Forget about 20..,how about 3..?
City fans'game attendance record leaves much to be desired,it peobably will improve (well in the early runnings)because of Sterling inclusion,the fly by night club may very well go beyond the stage in the CL it routinely gets booted at,then there is Jersey sales,those are some of thave e things that offsets the money paid to acquire a player.
Yes,accounting is all about being systematic and methodical but there are always minor procedural differences among different countries.
Believe me,I am well versed on the accounting side of businesses,oddly enough that go es without saying for people that know me a tad bit more than..,lol.

[Rockman]

Tell me where in tge balance sheet infinite assets are recorded?

[Peter R]

Boss man, what exactly are saying here? let me make an effort to understand.

I don't have any problem with using "layman's" language, however, I think I have tried to break it down for you so that at least You have some idea of what transpires (possibly) behind the headlines... If you say "depreciate" your audience, depending who they are, can very likely misinterpret what you're saying. Do you understand that , at least? Try and answer the question please. One person thinks loss in value, another might think expensing an asset, so while you might want to push for layman's terms, it's not just as simple as that. It might mean, a person actually using his brain to understand a concept.

However, your last line is of course what everyone tries to do... buy low, sell high. My problem is I have lost track of what we're discussing here. I have simply been trying to educate the massive about certain things in terms of accounting, while not passing myself off as an expert.

Nobody will argue with buy low, sell high... the truth is that sometimes you buy "low" and sell "low" or buy "high" and sell "low" or any combination of "buy/high/sell/low". Adding value can be a crap shoot, so if you have the magic bullet, you should sell it to the clubs cause you and Rocky seem to know all the answers regarding maximizing value. Me, I don't know sh!t , so break it down again for my simplistic mind, what exactly are we "arguing" about??

[Peter R]

What is a profit or loss account? I don't know so please explain. I genuinely do not know. I do understand income and expenditure... BUT please tell me where I spoke about profit and loss accounts in the post you answered to. I don't think I used those expressions, "profit/loss accounts" but please again I beg yu direct me so I can see what you're talking about.

"Depreciation lowers the value of fixed assets, that is evident in the P&L accounts..." You just run an read an accounting textbook or what? LOL Well read again.. the depreciation when recorded is recorded as an EXPENSE which is an income statement item, and then as a contra ASSET on the Balance Sheet.

As to the asset being recorded as a lower value when depreciated, I already said this; I said that the Cost LESS the depreciation amount is the amount recorded on the Balance Sheet so stop gwaan like yu a seh anyting new!

What you have failed to reiterate, since you into that business, is that the MARKET value of the asset may have either increased or decreased according to circumstances. That however is NOT recorded necessarily, although there may be a write down of an asset ( but not a "write up" to coin a phrase). Gains or Losses are typically only recognized upon sale.

But since I am speaking in circles and to be honest, I'm not sure what I'm discussing, I am taking a drinks break! Going to shake my head and wonder what manner of beasts are unleashed upon this forum.

[Peter R]

Read again bredrin! There is no such thing as an INFINITE or FINITE ASSET. The asset is INTANGIBLE, with a FINITE life or an INFINITE life. Coca Cola owns the trademark "coca cola", all they do is every so often pay a nominal fee and they own that name into perpetuity, an INFINITE life. A patent, another INTANGIBLE asset, on the other hand can only be owned for so many years, a FINITE life.

Intangible Assets are, well assets and so recorded on the balance sheet as such!

Sheeshh!!

[Peter R]

Years ago, the CEO of Coca Cola said that if the company were to, by some stroke of fate, lose all of its tangible assets, i.e. plant, equipment, machinery etc. etc. and all they were left with is the name "Coca Cola", an INTANGIBLE asset, they would have no problem rebuilding the company because of how valuable the brand name is.

Of course you purchase a player if you think he will improve your club, City didn't buy Sterling to make a loss. They have a certain expectation of the player and how he will enhance their product on the field. Bottom line is there is no guarantee. When LFC bought Carroll I don't think they bought him to see him sit on the bench, or to fail on the field. (Torres at Chelsea, same thing). It didn't work out though so the club took a haircut with him.

BTW, if you get a chance read the article I linked on Soccer player valuation under my "I feel I'm beating a dead jackass" post and see what they say about clubs protecting their brand...

[Sir X]

Ask yuh brethren Paul , he wants accounting scientific Jargon to explain why we cant compete with the Big boys ,worse yet why it maks sense in selling or holding onto Sterling in the reserves.

When Rafa said we cant compete with the big boys financially ,we have to depend on our academy and invest in our scouting system as a way to compete ,he didnt draw for an accouting book ! Paul went to school and graduated when FSG bought the club ( He couldnt understand Rafa) ,he still cant understand how midtable is making all LFC tangible assests depreciate ,rot at a loss at an alarming rate, where we cant compete at the academy or scouting level, in other words our money spent will become less,the value added will be harder to build in tangeble assests where LFC can compete.


Yuh zimi he is happy explaining all this away at an academic level as LFC rots.

[Rockman]

I have been following the discussion from day one(not just this thread),you have used P&L in prior discussions.Depreciation is an expense ergo it is listed in the P&L accounts,Peter R I do not need a refresher course in Accounting.