THAT Debate, and the Beauty of Hindsight


Regarding the losses vs income question, my attempt at an Accounting …

Comment on THAT Debate, and the Beauty of Hindsight by zerotolerance1903.

Regarding the losses vs income question, my attempt at an Accounting 101 follows. 
There are three principle statements in a set of accounts. 

1. A Profit and Loss account.  This is where revenue (ticket sales, sponsorship, TV money) and it’s related costs (wages, maintenance, etc) are shown.   Revenue less cost = profit if revenue is bigger or loss if costs are.   What can be included as revenue or costs are defined by accounting standards.  

2. A Balance Sheet.  This shows on one side your assets (stadium, player registrations, debtors, stock in the shop, cash and bank) less your liabilities (creditors, loans, overdrafts).  This has to balance with Equity (i.e how much shareholders paid to buy their shares in th einitial allocation) plus retained profits.  

3. Cash Flow. Not every item on the Proft and Loss perfectly represents a cash movement e.g. when you buy a player cash might go out the door Day one but in the profit and Loss you would allocate this over the length of th contract aka amortisation.   The cash flow statement adjusts for the non cash stuff in the profit and Loss and shows the change in a company’s net cash position over the year and explains it. Essentially this would show how losses have been met by an increase in overdraft or loans.  

So in short loans cannot be counted as income.  They are liabilities in the balance sheet and an increase in loans will be shown to offset losses in the cash flow statement i.e. losses deplete your bank balance, loans restore it whilst creating a liability. 

Recent Comments by zerotolerance1903

Time to Ditch the Geek Show
Also regarding McInnes, bear in mind that he turned down an offer from Sunderland this summer.  He would have had a handsome salary and transfer money to spend, but just didn’t fancy it.  As I said, no daft.  

Time to Ditch the Geek Show
HOMUNCULUSOCTOBER 29, 2017 at 11:36 0 0 Rate This
Surely there wouldn’t be any deal other than
“If someone wants to employ our manager, who has recently signed a new contract then they will have to pay us £1m (or whatever) to break that contract. Then he is free to do what he wants”
Given that Aberdeen were second in the league and in both cups last year, they cannot in a hurry to get rid of him.
Or are they, maybe an Aberdeen fan could enlighten us.
I’m sure it comes as no great surprise that McInnes is immensely popular with the Aberdeen support, and it’s about more than just getting the first team knocked into competitive shape but also other aspects of the Club, top to bottom. Overall the Club is in much better shape after a series of terrible managers and mismanagement at the Club for many years. 

Therefore, it will also come as no surprise that Milne will be hung drawn and quartered if he lets McInnes go without a fight, especially to “them”.  Obviously we can’t do anything if they throw the required level of compensation at it but anything less will be unacceptable. 

That said, McInnes is not daft. He’s onto a good thing at Aberdeen and he surely knows that Sevco is a basket case.  The treatment of Warburton and Caixinha cannot have gone unnoticed.  I’d be surprised if he jumps ship for anything less than a Premiership Club. 

Time for Scots Government to Take Bull by the Horns
What a shock, Ryan Jack failed to grab a hold of the game.  Sat too deep it seems,  well duh.  There’s a reason that very few tears were shed in the North East when he didn’t sign a new deal. 

Time for Scots Government to Take Bull by the Horns
Oh dear Pedro.  

Você está sendo demitido pela manhã.

Time for Scots Government to Take Bull by the Horns
@Jimbo – surely you mean the best Scottish export since whisky?  Rather than whiskey!!!

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