Oblomov Boblomov wrote:It seems very odd. Unless there is more to it that hasn't yet come out, it appears the EFL signed off on the sale of the ground, with full consideration to the nature of the sale, then 18 months later realised that actually it doesn't like it, so decided to effectively rule against its own agreement...
It’s not just the stadium value though. There’s some very creative accounting going on too with the amortisation charges.
As a former auditor, and someone who has audited football clubs in the past I have no idea how Derby got their auditors to sign off on the accounting policy change made in 2017 for player contracts, let alone the EFL.
The concept of amortisation is entirely new to me, I think... can you give a layman's explanation?
This is a good article on it, in relation to Derby:
Seems like a classic case of dodgy accounting practices to bend the rules within an inch of their lives.
Sometimes the reason for an impairment is clear and the decrease in value is understandable (due to long term injury, the fee initially paid was too high or the player is Mario Balotelli).
The confusion remains (as noted at the end of the article) that the EFL itself signed off on all of this. They can decide they were wrong at the time and adjust rules accordingly, but surely they can't punish the club for it?!
Tomous wrote:It'll depend what "sign off" from the EFL actually means and how involved they were.
You'd have thought if it's well documented Derby will have a very good legal basis for challenging any decision by the EFL.
I guess we'll find out further down the line.
Extract from the club statement:
At all times, the Club has acted transparently with the EFL in its submissions for both FFP/P&S and, in respect of the charges above, had received written approval for all of its submissions in respect of this legislation. No allegation has been raised to the contrary by the EFL. Rather, the EFL now claims that it made a “mistake.”
The Stadium was valued by professional valuers immediately prior to the transaction. The transaction and valuation were discussed extensively with the EFL Executive, which asked for a relatively modest price adjustment which was accepted. The valuation report was prepared by a highly reputable and professional and independent firm, with industry experience, who had valued the stadium on two prior occasions, one in 2007, and one in 2013.
The Club discussed the rationale for the stadium sale with the EFL Executive, ahead of the transaction, supplied and discussed the valuation, and bar a small adjustment in respect of its FFP/P&S submissions, the Club was given written approval.
With regard to the Club’s player amortisation policy, this has been a long-term accounting policy and was again reported transparently to the EFL Executive as part of the Club’s submissions and these were again approved and signed off in writing.
While the Clubaccepts the EFL’s FFP/P&S regulations are complex and open to interpretation, it is critical when such matters have been discussed and reviewed in detail, that written approval from the EFL is the only basis on which a Club can be assured it has complied. These charges by the EFL Executive bring this fundamental aspect of governance into question. The EFL now claims it made a mistake and seeks to punish the Club that relied on the EFL’s approval. Such conduct is neither lawful nor fair.
Had the EFL not given the green light in writing in respect of both charges, the Club would have reacted accordingly. The Club cannot re-trace the steps of the actions it legitimately took in good faith as a result of EFL approval of both matters.
The EFL can choose to correct what they now see as an error in their decisions. However, it cannot punish the Club for its own errors.