QPR fiddling the books?

[seagullsovergrimsby]

Is this a fait accompli between several parties to avoid an astronomical fine being handed over to charities and long winded legal ramifications over a club being expelled from the Football League upon relegation from the Premier League ?

 

[tinycowboy]

Cannot see how a loan write off could ever satisfy the definition of income. If it does then FFP is even more of a farce than before.

Is there an FFP definition of "income"? If it's going to their P&L, I would think it's more likely to be income than expense. Is the loan write-off from a loan given by a shareholder? If so, I would say it would seem most likely that this is actually a deemed capital contribution from a holder of equity.

 

[KZNSeagull]

But Forest have pumped in £500m over 10 years and called it stadium sponsorship.

Yes, but they have failed the FFP rules. Re your earlier post re a back dated invoice, sponsorship has to be reasonable. 60m a year for sponsoring QPR in the Championship is not.

The FL have yet to ratify QPR's accounts. I do hope that they grow a pair and point out their failings to them!

 

[Buzzer]

Yes, but they have failed the FFP rules. Re your earlier post re a back dated invoice, sponsorship has to be reasonable. 60m a year for sponsoring QPR in the Championship is not

Of course! As Tinycowboy has said, is there a definition of income for FFP because if QPR can somehow convert the loan into income (gift?) then they would be covered.

 

[seagullsovergrimsby]

The FL have yet to ratify QPR's accounts. I do hope that they grow a pair and point out their failings to them!

Same odds as Sepp Blatter announcing his retirement

 

[El Presidente]

It wouldn't be operating income but would have to appear in the P&L as a credit somewhere therefore reducing bottom line losses

In which case it should surely go straight to equity, and bypass P&L.

 

[Ernest]

I so hope they get relegated even if it means Palace staying up

 

[El Presidente]

Of course! As Tinycowboy has said, is there a definition of income for FFP because if QPR can somehow convert the loan into income (gift?) then they would be covered.

All income is reviewed for reasonableness by the FL. In Tony Fernando has gifted the club £60 million (which he has effectively done anyway as he would never have recovered his loans) simply to avoid the FFP Tax that would have been imposed, and the FL has accepted this, then they are showing complete cowardice.

 

[El Presidente]

I so hope they get relegated even if it means Palace staying up

Never, never, never, never, never.

 

[El Presidente]

I'm not so sure you can't gift a club money.

You can, but it isn't taken into account when determining FFP losses, otherwise Manchester City and PSG's owners would have done the same and escaped sanctions.

 

[Blue Valkyrie]

Nothing would surprise me with FFP.

My feeling is that it is unworkable, and because of this should be scrapped so it becomes fair, in that everyone knows where they stand.

There is no fairness in some teams finding supposed loopholes and wriggling out of any sanctions.

BIN THE FFP.

 

[rool]

In which case it should surely go straight to equity, and bypass P&L.

I would have thought that was optional. Forgetting this is a football club for the minute, possibly trying to circumvent FFP, I would imagine a company director/investor is within his rights to write off a loan or convert to equity. I can't back that up with anything concrete though.

 

[Husty]

I thought the point of FFP was to get teams to live within their means. If the chairman wants to give the clubs £60mil then surely that is fine as long as the club is seen to be spending the money sensibly?

 

[KZNSeagull]

All income is reviewed for reasonableness by the FL. In Tony Fernando has gifted the club £60 million (which he has effectively done anyway as he would never have recovered his loans) simply to avoid the FFP Tax that would have been imposed, and the FL has accepted this, then they are showing complete cowardice.

Has this reasonableness test ever been defined? PB was asked ages ago if clubs had been given guidelines as to what was and was not acceptable for sponsorship deals under FFP, and he answered that yes they had, but didn't elaborate. I don't suppose you have seen them as part of your investigations/work? I am guessing that they would be some sort of criteria based upon attendances, other deals at clubs within the same division etc.

 

[Buzzer]

All income is reviewed for reasonableness by the FL. In Tony Fernando has gifted the club £60 million (which he has effectively done anyway as he would never have recovered his loans) simply to avoid the FFP Tax that would have been imposed, and the FL has accepted this, then they are showing complete cowardice.

Thanks for the clarification and it then begs the question what is the definition of 'reasonable income'? Have FFP issued guidance on this or is it deliberately woolly?

 

[El Presidente]

Thanks for the clarification and it then begs the question what is the definition of 'reasonable income'? Have FFP issued guidance on this or is it deliberately woolly?

Woolier than a mammoth during a particularly cold spell I suspect.

Given that the FL have effectively shown the white flag to FFP from next season, by allowing £39 million of losses over 3 seasons, perhaps they didn't fancy a fight with Fernandes' very expensive lawyers over the issue.

I am aware that there have been discussions between QPR and the FL for some time, suspect this is a cop out that suits both sides, QPR pay a small FFP fine if they go down, and the FL try to take the moral high ground by showing some money has gone to charity.

 

[Goldstone1976]

In which case it should surely go straight to equity, and bypass P&L.

Only if the ex-loaner received shares when the loan was cancelled, shirley? Otherwise, a straight write off would be Dr loan account creditor, Cr P&L...

All income is reviewed for reasonableness by the FL. In Tony Fernando has gifted the club £60 million (which he has effectively done anyway as he would never have recovered his loans) simply to avoid the FFP Tax that would have been imposed, and the FL has accepted this, then they are showing complete cowardice.

but this is true too. FL showing cowardice? Never!

 

[El Presidente]

Thanks for the clarification and it then begs the question what is the definition of 'reasonable income'? Have FFP issued guidance on this or is it deliberately woolly?

It does mean the Albion could have done something similar last season. TB could have written off £50 million of his loans, and Oscar could have then spunked it on 3-4 really good players, AND we would still have complied with FFP.

I did have a conversation with someone high at the club who said (giving an example) that if someone won £100 million on the Lottery, and decided to gift half of it to the Albion, it wouldn't help them from a FFP perspective.

 

[El Presidente]

Only if the ex-loaner received shares when the loan was cancelled, shirley? Otherwise, a straight write off would be Dr loan account creditor, Cr P&L...

Without wanting to turn this into a double entry wankfest (I do have the film of the same name BTW), I would Cr Reserves, the write off has nothing to do with trading.

 

[rool]

Without wanting to turn this into a double entry wankfest (I do have the film of the same name BTW), I would Cr Reserves, the write off has nothing to do with trading.

Shirley it's a taxable gain though and would need to be disclosed as such?