No title (filetitle: Bor kontraktrettigheder indregnes til dagsvardi Afhandling)

Abstract

Player registrations of footballers are an example of a financial statement line item that is complex to classify and measure. Firstly, is it possible for a football club to classify a key employee as an asset? Does the football club have the control and rights of the players? The answer is yes if you consider the player registrations as contract rights instead of an employee. The clubs have the sole rights to use the players in matches and it is not possible for the players to end their employment contracts without mutual agreement with the club. It is even harder to decide how to measure a player registration in order to present a fair presentation of the financial statements and value in use for the external users of financial statements. Today, football clubs are measuring their player registrations by the cost method. This includes the initial measurement of transfer fees and other contract fees. The subsequent measurement consists of amortization of the costs over a period corresponding to the signed contract period. This means that player registrations’ value is being decreased in the financial statements while talented players tend to be sold at an increased value. Based on the Danish listed company Parken Sport & Entertainment (PS&E) that holds the football club F.C. Copenhagen, this assignment enlightens whether measuring player registrations by the revaluation model will improve the fair presentation of PS&E’s financial statements and value in use for the external users of their financial statements. We have performed measurements of PS&E’s player registrations by the revaluation model. The financial statements with player registrations measured by the revaluation model have been compared to PS&E’s existing financial statements measured by the cost model. In addition the financial statements have been compared to three other Danish listed football clubs. Furthermore, the effect of measuring the player registrations by the revaluation model have been discussed with selected informants representing external users of PS&E. It was concluded that the cost approach represents the fair value of PS&E’s financial statements even though player registrations are less undervalued when measured by the revaluation model. The value in use is also better when measuring player registrations by the cost method as it contains less subjectivity from the management of PS&E