Since 62's commentary on club accounts y/e 31/5/19.

[NottinghamBlue]

It is exactly not what other Championship teams did.

Other Championship teams sold the stadium to owner / companies involved with owner which paid far over market value of stadium to funnel funds in avoiding FFP.

Yes, but the outcome is identical. They all increased the value of the stadium to reduce losses.

[BlueToujours]

Yes, but the outcome is identical. They all increased the value of the stadium to reduce losses.

The increase in the value of an asset is not a profit and loss item therefore it cannot reduce the amount of any loss. It can, of course, increase the net worth of the company. The only way that it can be included in the P&L is upon a sale. Therefore, the outcome is not identical.

[NottinghamBlue]

The increase in the value of an asset is not a profit and loss item therefore it cannot reduce the amount of any loss. It can, of course, increase the net worth of the company. The only way that it can be included in the P&L is upon a sale. Therefore, the outcome is not identical.

I quote Since62, "Firstly, the 2018 loss was significantly reduced down to £9m by a £27m revaluation adjustment on the club`s stadium."

[Papa Ratzi]

I quote Since62, "Firstly, the 2018 loss was significantly reduced down to £9m by a £27m revaluation adjustment on the club`s stadium."

We have not sold the ground, the value of it, as with any piece of real estate, has changed between one set of accounts and another.

[BlueToujours]

I quote Since62, "Firstly, the 2018 loss was significantly reduced down to £9m by a £27m revaluation adjustment on the club`s stadium."

You will need to ask Since 62 exactly what he meant by that but I stand by my statement. A company cannot reduce it losses by merely increasing the value of its assets until any of the assets are sold at a greater figure than its book value. The increase in value will be shown in the accounts as a revaluation reserve thus increasing the net worth of the Company not its annual profit.

In the cases of DerbyCounty. Sheffield Wednesday and, I believe, also Aston Villa, the asset ie the Stadium, was sold at a greater value than in its books thus creating a profit on sale the sale of the asset.

[Since62]

You will need to ask Since 62 exactly what he meant by that but I stand by my statement. A company cannot reduce it losses by merely increasing the value of its assets until any of the assets are sold at a greater figure than its book value. The increase in value will be shown in the accounts as a revaluation reserve thus increasing the net worth of the Company not its annual profit.

In the cases of DerbyCounty. Sheffield Wednesday and, I believe, also Aston Villa, the asset ie the Stadium, was sold at a greater value than in its books thus creating a profit on sale the sale of the asset.

The revaluation surplus in 2018 DID go through the profit and loss account (more accurately called the Consolidated Statement of Comprehensive Income - boring accounting terminology) with the effect of reducing the reported loss for the financial year by £27m.The asset doesn`t have to leave the club to impact on reported profits even though it is not a "normal" trading item

[BlueToujours]

The revaluation surplus in 2018 DID go through the profit and loss account (more accurately called the Consolidated Statement of Comprehensive Income - boring accounting terminology) with the effect of reducing the reported loss for the financial year by £27m.The asset doesn't have to leave the club to impact on reported profits even though it is not a "normal" trading item

Thanks for the explanation. Since my retirement I have clearly become out of date in such matters. Not an accountant but spent many years in Commercial Banking and apart from the possible exception of property companies, then using such a transaction in the P&L would have been considered somewhat creative and would immediately have been immediately discounted when assessing a company's financial performance. It would have been treated as a windfall. Anyway. as I have said, am clearly out of date.

My apologies also to Nottingham Blue who clearly read your comments more carefully than I did.

[tell it like it is]

Yes, but the outcome is identical. They all increased the value of the stadium to reduce losses.

Big difference between selling way above market value to invest into club, contrary to FFP and having an independent valuation of the stadium.