Joint Venture Company

[Vulmea]

Any brains out there?

 

Can somebody tell me what a Joint Venture Company is or point me to the appropriate thread? and why the one in our accounts is £10million richer than it was last year - if I'm reading it wrong please forgive me I'm a low born 2nd son of a mule trader (bricklayer actually) and have no education............it may be 10 million worse off..........

 

also while I'm at it what the hell does 'amortisation of player registrations' actually mean because it costs us a hell of a lot of money.........

[aws]

Tim is the accounting brains on here and he'll probably be along later.

 

A joint venture company is basically a company which is set up to do a particular job and is owned by a few major investors rather than being a subsidiary of just one investor.I think the accounts are referring to lfc.tv which (I think) is not wholly owned by the club.Can't remember the £10m figure you mention though.

 

Amortisation is basically depreciation.If you buy a player for £20m on a four year contract then in four years time (if you don't extend his contract) he can go for nothing and your accounts for that year would show a loss of an asset still shown in the accounts at the purchase price of £20m.To smooth this out,the accounts will probably depreciate/amortise the £20m by £5m every year.

[Section_31]

Any brains out there?

 

Can somebody tell me what a Joint Venture Company is or point me to the appropriate thread? and why the one in our accounts is £10million richer than it was last year - if I'm reading it wrong please forgive me I'm a low born 2nd son of a mule trader (bricklayer actually) and have no education............it may be 10 million worse off..........

 

also while I'm at it what the hell does 'amortisation of player registrations' actually mean because it costs us a hell of a lot of money.........

 

Just a wild stab but could the joint venture company be someone who has invested in us and are reaping the champions league cash windfall? Venture capital?

[Vulmea]

Tim is the accounting brains on here and he'll probably be along later.

 

Amortisation is basically depreciation.If you buy a player for £20m on a four year contract then in four years time (if you don't extend his contract) he can go for nothing and your accounts for that year would show a loss of an asset still shown in the accounts at the purchase price of £20m.To smooth this out,the accounts will probably depreciate/amortise the £20m by £5m every year.

 

 

ahh excellent - so the fact we let a lot of players go on frees all round the same time would account for some of that Smicer, Biscan,Vignal, Luzi, Henchoz, along with the fact we still have lots of players and all of their contracts are wearing down... makes sense I guess....... thanks for that

[aws]

Just a wild stab but could the joint venture company be someone who has invested in us and are reaping the champions league cash windfall? Venture capital?

 

That's not the case.

 

Anyway a lot of the CL extra cash (about £10m I think)went in player and staff bonuses.

[Vulmea]

Just a wild stab but could the joint venture company be someone who has invested in us and are reaping the champions league cash windfall? Venture capital?

 

Don't think so because its all still shown in our accounts - from what I can see LFC look like they own this venture company - If I was guessing I'd say we've set up a company to manage the new stadium build and given them 10m smackers... but I may be way off beam which is why I thought I'd ask the question

 

The other thing that seems odd is that our wage bill has gone up 10 million quid in 2 years - we can't have paid out that much in bonus's for winning the CL can we? ..........or is it the cost of having a very big but average squad last year?

[aws]

Don't think so because its all still shown in our accounts - from what I can see LFC look like they own this venture company - If I was guessing I'd say we've set up a company to manage the new stadium build and given them 10m smackers... but I may be way off beam which is why I thought I'd ask the question

 

The other thing that seems odd is that our wage bill has gone up 10 million quid in 2 years - we can't have paid out that much in bonus's for winning the CL can we? ..........or is it the cost of having a very big but average squad last year?

 

 

I think you are way off beam in respect of the jv company.I've just had a look at the accounts and it is lfc.tv.I still can't find this £10m figure in the accounts.What section is it in?

 

The wage bill increase is mostly the bonuses,I think.

[Vulmea]

I think you are way off beam in respect of the jv company.I've just had a look at the accounts and it is lfc.tv.I still can't find this £10m figure in the accounts.What section is it in?

 

The wage bill increase is mostly the bonuses,I think.

 

easiest place to spot it is section 15 of the Notes to the Accounts but it is referenced in section 26 of the Notes to the Accounts - as I said I don't know exactly how to interpret it - I accept completely I may be barking up the wrong tree

 

if the wage bill increase is mainly bonus's 2003 our wage bill was 54 million - it was 55 in 2004 (plus a hefty payment 10.7 to Ged et al) and its 64 now - 9 million in bonus's? 30 people at 100,000K is only 3 million............jeees

[matthew45]

I think the JV question has been answered. Strictly speaking, amoritsation of players registrations means the 'payment of an obligation in a series of installments or transfers'. A player's registration is what you purchase from another club. So amortisation of players registrations = transfer fees

[aws]

easiest place to spot it is section 15 of the Notes to the Accounts but it is referenced in section 26 of the Notes to the Accounts - as I said I don't know exactly how to interpret it - I accept completely I may be barking up the wrong tree

 

if the wage bill increase is mainly bonus's 2003 our wage bill was 54 million - it was 55 in 2004 (plus a hefty payment 10.7 to Ged et al) and its 64 now - 9 million in bonus's? 30 people at 100,000K is only 3 million............jeees

 

The jv dealings/debt are only a few hundred thousands.It's other debtors which have gone up by £10m.

 

I'd imagine the bonuses to management and the CL squad are going to be a lot more than £100,000 each.That's less than a month's wages for most of them.

[Vulmea]

The jv dealings/debt are only a few hundred thousands.It's other debtors which have gone up by £10m.

 

I'd imagine the bonuses to management and the CL squad are going to be a lot more than £100,000 each.That's less than a month's wages for most of them.

 

 

aah the third line ........told you I was dense.........still seems like a lot of dosh but the creditors have gone up as well by a similar amount but there is a note to say that the creditors are mainly down to transfer fees still to be paid.. 17m worth? would it be safe to assume the trade debtors (16m) are transfer fees owed to us then?

 

there's definately a reason why I'm not an accountant or even literate

[aws]

aah the third line ........told you I was dense.........still seems like a lot of dosh but the creditors have gone up as well by a similar amount but there is a note to say that the creditors are mainly down to transfer fees still to be paid.. 17m worth? would it be safe to assume the trade debtors (16m) are transfer fees owed to us then?

 

Don't know how the debtors breakdown.But I think we're owed a bit for Diouf and Heskey (but not if Brum go down).

[Vulmea]

The jv dealings/debt are only a few hundred thousands.It's other debtors which have gone up by £10m.

 

I'd imagine the bonuses to management and the CL squad are going to be a lot more than £100,000 each.That's less than a month's wages for most of them.

 

 

aah the third line ........told you I was dense.........still seems like a lot of dosh but the creditors have gone up as well by a similar amount but there is a note to say that the creditors are mainly down to transfer fees still to be paid.. 17m worth? would it be safe to assume the trade debtors (16m) are transfer fees owed to us then?

 

there's definately a reason why I'm not an accountant or even literate