KFC Diest

 

The new accounting standard threatens bankruptcy football clubs

Eight historic Spanish football clubs -Celta, Malaga, Sporting, Levante, Real SMandrid, Alaves, Murcia and Barcelona-, mostly in inferiores- categories and have been forced to qualify for a bankruptcy process recently. But the situation may worsen in the coming months in the big teams, due to the new General Accounting Plan by bookkeeping services brisbane, which introduces changes in the way of accounting for the income of clubs.

The new accounting standards can sidelining large Spanish football teams. In the final of the League, the adaptation of the General Accounting Plan (PGC) to sports clubs is aggravating their already serious financial complications, changing the way computing their main income in the income statement. The seriousness of the current situation leads to dozens of teams of Spanish league -for the time being, inferiores- categories are now on the verge of disappearance. In the best case, on many sports societies flies over the specter of bankruptcy and demotion.

The main reason for the recent accounting changes resides in television rights, which may make up half of the total income of a team. The reason: how to account for this chapter, instead of computing as equity (as equity club for all purposes), now included as an imprest account whose income can not be taken into account for the purpose of entering or not in a bankruptcy proceeding (bankruptcy). Along with this change in the way of considering income, temporary accounting problem appears because the changes alter the way of distribution among different exercises.

If not emit, not cobras
“In the multi – year item of expenditure and revenue included, so far, revenue from the television broadcasting ‘matches, explains Jorge Pecourt, tax expert in sports law Cuatrecasas. “Under the old regime, teams always included this item in the total count account waiting to enter” within equity, he adds. That is, once entered even though his computer out for several years.

But the PGC must now adapt to change this situation: the new accounting considers that, since it is television revenue several years, should be treated as an advance. Thus, this type of income, which does include fully for the purposes of normal operation of the company, do not as such deciding a bankruptcy process, a situation that now lurks dozens of clubs in Spain.

In this way, teams can no longer be included as base for possible uncollectible revenue all multiannual television revenue as the previous standard allowed (1991). This change, according to industry sources, the chances of bankruptcy triggers clubs. The PGC has thus topped the battered situation that crossed the teams, especially in the Second, Second B and Third Division. While much of the clubs first admit that they have delayed implementation of the new PGC. For now, they have only flirted with these rules, which will not be reflected at all in the accounts until July.