Champagne au Mont d'Or, January 28, 2018
The accounting doctrine currently in force is essentially based on two major founding principles of accounting law, namely valuation at historical cost and the principle of prudence.
Consequently, in soccer clubs, acquired players are subject to an accounting translation since the acquired player contracts are activated and then "amortized" in the accounts over the duration of the contract to arrive at a "zero" asset value at the end of the contract. But can't these acquired players increase in value on the transfer market? Don't they have an intangible value?
The players from the soccer club's training center are not subject to any accounting treatment and are not capitalized. Do they have no value? Are they not key assets of the club from which future economic benefits are expected?
The IC-Report Football® provides additional but essential financial information for soccer clubs whose main assets are players.
The innovation in terms of financial information provided by the IC-Report Football® cannot, in the current state of the law, be the subject of a treatment in the company or consolidated accounts. However, we can affirm that the accounting methods used to establish the IC-Report Football® and to reflect the impact of the fair value of the Human-Player Capital, an intangible asset, in the balance sheet and income statement of soccer clubs are in line and consistent with those that would be implemented and retained in the consolidated accounts of the clubs if the current accounting doctrine allowed and authorized, on the one hand, the capitalization of intangible capital on the assets side of the balance sheet and, on the other hand, the use of the fair value of intangible assets to value intangible assets.
The Human-Player-Capital is the most important asset of soccer clubs from which future economic benefits are expected. It is also an asset that can now be measured thanks to the Thesaurus-Football® valuation standard and by reference to existing transactions on a market (mercato). While changing the accounting Doctrine in this area may seem to be a delicate matter, why should the reader of the soccer club's consolidated accounts be deprived of an external financial report, even attached in the notes, supplementing the financial information and illustrating the fair value of the club's main asset, the soccer players?
The IC-Football Report® should therefore become a real financial information tool that complements the financial information contained in the corporate or consolidated accounts of soccer clubs.
Christophe Dumas Chartered Accountant and Auditor d2cconsultants
