Opinion of an Auditor on the Human Capital

Opinions on Human-Player Capital

Ginkyo Ratings has done significant work on the financial valuation of the intangible value of Player Capital in a professional soccer club.

A mathematical method based on a qualitative and quantitative evaluation has been developed and tested. This method makes it possible to evaluate at a given date the potential capital gain or loss on the current contracts of professional players.

The accounting rules provide for the recognition of a provision for potential losses on intangible assets. Conversely, no potential gain should be recognized.

Players' contracts are capitalized as intangible assets and amortized over the term of the contract, when they have been purchased from another club. Professional players from the training center do not appear as assets because their contract has not been acquired. Any capital gain will be reflected in the financial statements when the contract is sold to another club.

In my opinion, the tool developed by Ginkyo Ratings and the revaluation of contracts have two major advantages:

  • Financial evaluation of professional clubs by integrating in a patrimonial approach the revaluation of intangible assets, corresponding to current contracts.
  • Accounting information essential to either justify provisions or to enrich the information of the reader of the annual accounts by means of information in the accounting appendix on this estimated market value compared with the book value, in the event of an unrealized capital gain.

This information in the accounting appendix will provide real insight and additional relevant information for the reading of the annual accounts. The method should be described and the detailed calculation should be verifiable by the auditor.

Done in Lyon, March 5, 2018

Damien Dreux
Chartered Accountant and Auditor
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