Experts boot out football reforms
Football finance experts dismiss calls for accounting reforms over footballers
Calls to reform the way in which footballers are accounted for have been
dismissed by football finance experts.
A research paper, released by academics at Cass Business School last week,
argued that accounting for players as intangible assets was risky and squeezing
club margins. The report said that players should instead be expensed through
income statements.
But PKF partner Charles Barnett said it ‘did not stack up’ for clubs to
expense player signings, as the value of these investments was only realised
after a number of years.
‘If you look at Newcastle, who have signed Michael Owen, they have the right
to play him and he can score goals, which will help the club to win games,
attain a higher league position and gain entry to tournaments. His performance
can improve income,’ said Barnett.
‘You wouldn’t write off a printing press or a drug patent as an expense, so
why should you do it for a player?’
Gilad Livne, the coauthor of the reports and a senior accounting lecturer at
Cass Business School, said: ‘Players have a very short shelf-life compared to
other assets and are also prone to the human factor. With assets such as
aircrafts and buildings, you know what to expect, but players are prone to
injury, illness and off-pitch problems. This makes treating them as assets
risky.’
It has been mandatory to treat players as intangible assets since 1998, under
FRS10.