Initial 10, then reduced to 6 + 2 Point Deductions

[pfim]

So what is this about?-

"Tottenham's losses over the last three years are beyond that threshold at £220.7m, but the annual depreciation charge of £72m, which refers to their stadium and other facilities, means they are not at risk of breaching PSR regulations."

That's exactly what that says. Their net loss was 220.7 but the depreciation charge doesn't count. So for PSR sake, they only lost 4.7 million (it's probably even less than that, I'm sure they have other eligible add backs).

 

[ChrisPW75]

That's exactly what that says. Their net loss was 220.7 but the depreciation charge doesn't count. So for PSR sake, they only lost 4.7 million (it's probably even less than that, I'm sure they have other eligible add backs).

so is that depreciation of the stadium value?

That's fishy, how do you calculate that??

 

[Bebeto]

2 tops!

I can see the logic of 2 points max indeed this season. That would take us to 8 for the season and under the 9 points in case of administration which would make sense as administration is a lot worse financially than breaching psr.

 

[pfim]

so is that depreciation of the stadium value?

That's fishy, how do you calculate that??

I'm just going off of what's in this thread. I haven't looked at their statements, I doubt the stadium is the only depreciable asset in that number.

It's not fishy. The stadium will have a total cost once it's completed. That is divided by 40 years. There's your depreciation expense. It's all governed by accounting standards.

 

[pfim]

I can see the logic of 2 points max indeed this season. That would take us to 8 for the season and under the 9 points in case of administration which would make sense as administration is a lot worse financially than breaching psr.

I'll stop you right there.

 

[Moomin]

I'm just going off of what's in this thread. I haven't looked at their statements, I doubt the stadium is the only depreciable asset in that number.

It's not fishy. The stadium will have a total cost once it's completed. That is divided by 40 years. There's your depreciation expense. It's all governed by accounting standards.

Wagebill for Spurs is about 45% of their turnover.

 

[ChrisPW75]

I'm just going off of what's in this thread. I haven't looked at their statements, I doubt the stadium is the only depreciable asset in that number.

It's not fishy. The stadium will have a total cost once it's completed. That is divided by 40 years. There's your depreciation expense. It's all governed by accounting standards.

Thanks. What i found difficult fathom was the formula used for calculating the depreciation. If their is a set accounting formula that is universally accepted by the HMRC then fine. However if their isn't, then it seems to me numbers can be made up out of thin air in order to manipulate the figures. Thanks for clarifying.

 

[pfim]

Thanks. What i found difficult fathom was the formula used for calculating the depreciation. If their is a set accounting formula that is universally accepted by the HMRC then fine. However if their isn't, then it seems to me numbers can be made up out of thin air in order to manipulate the figures. Thanks for clarifying.

It's not HMRC, it's IFRS. It's why companies go through financial audits (except 777 apparently). An auditor will review all of the expenses that the company wants to include in the cost of the stadium and be sure they're related to construction cost. A company can depreciate quicker than the standard, but never longer.

At the end of the day it's completely irrelevant to PSR as the expenses aren't included on the way in or the way out.

 

[pfim]

Wagebill for Spurs is about 45% of their turnover.

Despite the lack of trophies, it's a well run club.

 

[Moomin]

Despite the lack of trophies, it's a well run club.

100% better than how we are run.

 

[Dixieslaces]

I'm sure an actual accountant will jump in but depreciation is like player amortization; it's value spread out over life of the asset (term of contract for player). All assets are immediately depreciated and sometimes this happens early depending on tax laws. So £1B over 40 years (just throwing a number out) is £25 million a year before you add in other factors.

Thanks mate.

This is the bit where we say "can i just go back to watching football and not bothering with all this figures nonsense!" but this is where we are.

I used to run a small restaurant and had to purchase 3 mini ovens for various reasons and the accountant said dont worry about the cost we can add depreciation in and i never did ask him why lol, bit silly really as it obviously benefitted us, as per Spurs lol!

 

[Tony’s Carp]

I can see the logic of 2 points max indeed this season. That would take us to 8 for the season and under the 9 points in case of administration which would make sense as administration is a lot worse financially than breaching psr.

I don't think that argument will land because it's two separate charges. All they've said is one PSR charge shouldn't exceed the 9 points for admin, but that wouldn't apply to multiple ones landing in the same season.

A more plausible angle is that you shouldn't receive two points deductions in one season on what is by definition an annual offence. There's the popular argument that we delayed the first charge and so that's our fault but I think it's a rebuttable argument - we were charged in March, the PL asked if it could be done by May, we said that wasn't enough time for due process and, crucially the IC agreed with us. So it was delayed til this season by the IC themselves.

They held our argument to be correct, and if we raised a point that was correct I don't think they can take negative inference on it later. The blame for our first charge being delayed til this season lies with the PL as their rules (now changed) meant charging it too late in the season, as the IC held. So in actual fact it's the PLs fault we have faced two charges in one season.

Then of course you have all the double punishment arguments about the previous seasons but that's been done to death.

 

[Groucho]

They’re just gonna do what they want anyway.

 

[Tony’s Carp]

Thanks mate.

This is the bit where we say "can i just go back to watching football and not bothering with all this figures nonsense!" but this is where we are.

I used to run a small restaurant and had to purchase 3 mini ovens for various reasons and the accountant said dont worry about the cost we can add depreciation in and i never did ask him why lol, bit silly really as it obviously benefitted us, as per Spurs lol!

An accountant saying "don't worry about the cost" is precisely what's got us into all this!

 

[Dixieslaces]

Depreciation is not allowed unless you are using the asset in business. Since our stadium is not built and we are, therefore, not using it there is no depreciation allowable.

Thank you