FAO Tony Blue Williams re Derby finances

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FAO Tony Blue Williams re Derby finances

Postby ccfcsince1962 » Thu May 17, 2018 9:31 am

Creating a new topic Tony as otherwise my response to your query would just have been lost in the "snowgate" thread.

The debt forgiveness in their accounts is really the same as Vincent Tan`s debt write -offs in the CCFC accounts - it is badged as "exceptional" as it is not really in the normal course of business of the football club activities.

"Allowable" costs for FFP/P&S purposes include expenditure on youth development programmes, some stadium development costs etc. In CCFC`s case it also included a sum of just under £6m in 2016/17 to do with the accounting treatment of long term loans introduced by VT. You may recall , CCFC had a FFP problem a couple of years ago caused by a change in accounting rules when they disallowed a big credit in the accounts of about £13m triggered by that adjustment (which the club had to apply). Having disallowed the credit , they now have to disallow the cost (which can therefore be deducted off the net reported loss) as the adjustment reverses itself over the seasons.

Keith
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FAO Tony Blue Williams re Derby finances

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Re: FAO Tony Blue Williams re Derby finances

Postby Tony Blue Williams » Thu May 17, 2018 9:51 am

ccfcsince1962 wrote:Creating a new topic Tony as otherwise my response to your query would just have been lost in the "snowgate" thread.

The debt forgiveness in their accounts is really the same as Vincent Tan`s debt write -offs in the CCFC accounts - it is badged as "exceptional" as it is not really in the normal course of business of the football club activities.

"Allowable" costs for FFP/P&S purposes include expenditure on youth development programmes, some stadium development costs etc. In CCFC`s case it also included a sum of just under £6m in 2016/17 to do with the accounting treatment of long term loans introduced by VT. You may recall , CCFC had a FFP problem a couple of years ago caused by a change in accounting rules when they disallowed a big credit in the accounts of about £13m triggered by that adjustment (which the club had to apply). Having disallowed the credit , they now have to disallow the cost (which can therefore be deducted off the net reported loss) as the adjustment reverses itself over the seasons.

Keith


Thank-you Keith that is very informative information. Just wondering if you can answer me this. If an owner 'writes off' a loan/debt is that classed as 'new money' rather than converting debt to equity which is not?

Can the the writing off of debt/loans help the club to comply with FFP/P&S or is that not allowed?
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Re: FAO Tony Blue Williams re Derby finances

Postby ccfcsince1962 » Thu May 17, 2018 10:09 am

Tony Blue Williams wrote:
ccfcsince1962 wrote:Creating a new topic Tony as otherwise my response to your query would just have been lost in the "snowgate" thread.

The debt forgiveness in their accounts is really the same as Vincent Tan`s debt write -offs in the CCFC accounts - it is badged as "exceptional" as it is not really in the normal course of business of the football club activities.

"Allowable" costs for FFP/P&S purposes include expenditure on youth development programmes, some stadium development costs etc. In CCFC`s case it also included a sum of just under £6m in 2016/17 to do with the accounting treatment of long term loans introduced by VT. You may recall , CCFC had a FFP problem a couple of years ago caused by a change in accounting rules when they disallowed a big credit in the accounts of about £13m triggered by that adjustment (which the club had to apply). Having disallowed the credit , they now have to disallow the cost (which can therefore be deducted off the net reported loss) as the adjustment reverses itself over the seasons.

Keith


Thank-you Keith that is very informative information. Just wondering if you can answer me this. If an owner 'writes off' a loan/debt is that classed as 'new money' rather than converting debt to equity which is not?

Can the the writing off of debt/loans help the club to comply with FFP/P&S or is that not allowed?


Neither debt write offs nor debt to equity are regarded as "new money" for this purpose - it has to be new/fresh cash introduced. However , a debt write off does reduce losses in the profit and loss account and there is ongoing dialogue between the EFL and clubs about the extent to which this should be allowed in the FFP/P&S calculations.
Despite the fact that EFL rules will not apply to CCFC next season (and for many seasons we all hope) , I know the club are striving to ensure that we leave the EFL still compliant with their rules so that it doesn`t come back to bite us in the future as it did with QPR.
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Re: FAO Tony Blue Williams re Derby finances

Postby Tony Blue Williams » Thu May 17, 2018 11:50 am

ccfcsince1962 wrote:
Tony Blue Williams wrote:
ccfcsince1962 wrote:Creating a new topic Tony as otherwise my response to your query would just have been lost in the "snowgate" thread.

The debt forgiveness in their accounts is really the same as Vincent Tan`s debt write -offs in the CCFC accounts - it is badged as "exceptional" as it is not really in the normal course of business of the football club activities.

"Allowable" costs for FFP/P&S purposes include expenditure on youth development programmes, some stadium development costs etc. In CCFC`s case it also included a sum of just under £6m in 2016/17 to do with the accounting treatment of long term loans introduced by VT. You may recall , CCFC had a FFP problem a couple of years ago caused by a change in accounting rules when they disallowed a big credit in the accounts of about £13m triggered by that adjustment (which the club had to apply). Having disallowed the credit , they now have to disallow the cost (which can therefore be deducted off the net reported loss) as the adjustment reverses itself over the seasons.

Keith


Thank-you Keith that is very informative information. Just wondering if you can answer me this. If an owner 'writes off' a loan/debt is that classed as 'new money' rather than converting debt to equity which is not?

Can the the writing off of debt/loans help the club to comply with FFP/P&S or is that not allowed?


Neither debt write offs nor debt to equity are regarded as "new money" for this purpose - it has to be new/fresh cash introduced. However , a debt write off does reduce losses in the profit and loss account and there is ongoing dialogue between the EFL and clubs about the extent to which this should be allowed in the FFP/P&S calculations.
Despite the fact that EFL rules will not apply to CCFC next season (and for many seasons we all hope) , I know the club are striving to ensure that we leave the EFL still compliant with their rules so that it doesn`t come back to bite us in the future as it did with QPR.



Thanks I think I get it now, I'll keep your post to remind me next time this issue comes up (hopefully NEVER :thumbup: :ayatollah: )
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