Football and accounting set to collide
ANY CHANCE I GET to write about football is gratefully received. Obviously, writing about accounting doesn’t give me too many options to do so.
But there is a very contentious issue surrounding the future of football that could, in part, be influenced by numbercrunching.
Respected football journalist Keir Radnedge has penned a fascinating article describing the ebbs and flows of who holds the power in the modern game.
The top 200 European clubs have banded together under a body known as the European Clubs Association.
During its meeting questions were asked about how UEFA president Michel Platini’s brainchild – the financial fair play rule- would work in reality.
Platini intends clubs will manage their finances responsibly, effectively “breaking even”.
But how will financial fair play be measured, and what punishments meted out, were the ECA’s concerns.
The answers are unclear. One problem – and the reason I’m writing this – is that accounting standards differ from country to country, an issue flagged up in Radnedge’s article. Using incomparable numbers to gauge whether a club has met UEFA’s requirements will be extremely difficult.
Is IFRS the answer?? Maybe that’s a red herring. Separating out the “club’s” performance from that of its holding company seems the most important thing to achieve, rather than what statutory set of standards clubs file their accounts under.
Perhaps we need football accounting – a set of recognised, simple KPIs that Platini can get his accountants to run the rule over.
Then again, creating a robust accounting template is easier said than done. Under different accounting codes clubs might still come up with their own interpretations with which to ruin comparability.
Perhaps I’ll drop Platini the IASB’s number, the standards-setter hasn’t got much on at the mo.