IDEAS home Printed from https://ideas.repec.org/a/bla/ausact/v32y2022i3p334-351.html
   My bibliography  Save this article

The Beautiful Game: Fair Value, Accountability and Accounting for Player Registrations

Author

Listed:
  • Warren Maroun
  • Wayne van Zijl
  • Rottok Chesaina
  • Robert Garnett

Abstract

Currently, professional football clubs only recognise purchased player contracts (player registrations) in their financial statements. The costs associated with home‐grown players are expensed. Furthermore, acquired player registrations must be held under the historical cost model because revaluations are only permitted when an active market for identical intangible assets is available. This is rare and results in a club's most important asset class either being excluded from the balance sheet or carried at outdated amounts. Comparability among clubs is also compromised. Clubs with a player development strategy are disadvantaged in comparison to those that actively purchase established players because they report weaker balance sheets. Additionally, because the development and changes in the value of registrations are not accounted for over time, current revenues are mismatched with expenses related to investments in assets distorting performance assessments. In response, the current paper develops a normative framework for accounting for player registrations designed to provide a more detailed and transparent account of how clubs manage these important assets. The model complements financial statements by incorporating elements of historical cost and fair value whilst maintaining compliance with IFRS. The model's practical application is illustrated using three well‐known football clubs namely, Arsenal, Everton and Manchester United.

Suggested Citation

  • Warren Maroun & Wayne van Zijl & Rottok Chesaina & Robert Garnett, 2022. "The Beautiful Game: Fair Value, Accountability and Accounting for Player Registrations," Australian Accounting Review, CPA Australia, vol. 32(3), pages 334-351, September.
    • Handle: RePEc:bla:ausact:v:32:y:2022:i:3:p:334-351
    DOI: 10.1111/auar.12368
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/auar.12368
    Download Restriction: no
    File URL: https://libkey.io/10.1111/auar.12368?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Matt Pinnuck & Kevin Stevenson, 2021. "Enhancing the Interface between Standard‐setters and Academic Research," Australian Accounting Review, CPA Australia, vol. 31(3), pages 169-185, September.
    2. Douglas Skinner, 2008. "A reply to Lev's rejoinder to ‘Accounting for intangibles – a critical review of policy recommendations’," Accounting and Business Research, Taylor & Francis Journals, vol. 38(3), pages 215-216.
    3. Radu Tunaru & Ephraim Clark & Howard Viney, 2005. "An option pricing framework for valuation of football players," Review of Financial Economics, John Wiley & Sons, vol. 14(3-4), pages 281-295.
    4. Eli Amir & Gilad Livne, 2005. "Accounting, Valuation and Duration of Football Player Contracts," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(3‐4), pages 549-586, April.
    5. Bernd Frick & Franziska Prockl, 2018. "Information Precision In Online Communities: Player Valuations On Www.Transfermarkt.De," Working Papers Dissertations 37, Paderborn University, Faculty of Business Administration and Economics.
    6. Aboody, D & Lev, B, 1998. "The value relevance of intangibles: The case of software capitalization," Journal of Accounting Research, Wiley Blackwell, vol. 36, pages 161-191.
    7. Babajide Oyewo & Ebuka Emebinah & Romeo Savage, 2020. "Challenges in auditing fair value measurement and accounting estimates," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 18(1), pages 51-75, January.
    8. Ravenscroft, Sue & Williams, Paul F., 2009. "Making imaginary worlds real: The case of expensing employee stock options," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 770-786, August.
    9. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    10. Ahmed, Kamran & Falk, Haim, 2006. "The value relevance of management's research and development reporting choice: Evidence from Australia," Journal of Accounting and Public Policy, Elsevier, vol. 25(3), pages 231-264.
    11. Stephanie Leach & Stefan Szymanski, 2015. "Making Money Out of Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 25-50, February.
    12. Georgiou, Omiros & Jack, Lisa, 2011. "In pursuit of legitimacy: A history behind fair value accounting," The British Accounting Review, Elsevier, vol. 43(4), pages 311-323.
    13. Massimiliano Bonacchi & Kalin Kolev & Baruch Lev, 2015. "Customer Franchise—A Hidden, Yet Crucial, Asset," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1024-1049, September.
    14. Richard Barker & Anne McGeachin, 2015. "An Analysis of Concepts and Evidence on the Question of Whether IFRS Should be Conservative," Abacus, Accounting Foundation, University of Sydney, vol. 51(2), pages 169-207, June.
    15. Barker, Richard & Schulte, Sebastian, 2017. "Representing the market perspective: Fair value measurement for non-financial assets," Accounting, Organizations and Society, Elsevier, vol. 56(C), pages 55-67.
    16. Francisco Martín Lozano & Amalia Carrasco Gallego, 2011. "Deficits of accounting in the valuation of rights to exploit the performance of professional players in football clubs. A case study," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(3), pages 335-357, November.
    17. Macve, R.H., 2015. "Fair value vs conservatism? Aspects of the history of accounting, auditing, business and finance from ancient Mesopotamia to modern China," The British Accounting Review, Elsevier, vol. 47(2), pages 124-141.
    18. Xianjie He & T.J. Wong & Danqing Young, 2012. "Challenges for Implementation of Fair Value Accounting in Emerging Markets: Evidence from China," Contemporary Accounting Research, John Wiley & Sons, vol. 29(2), pages 538-562, June.
    19. Macve, Richard, 2015. "Fair value vs conservatism? Aspects of the history of accounting, auditing, business and finance from ancient Mesopotamia to modern China," LSE Research Online Documents on Economics 62740, London School of Economics and Political Science, LSE Library.
    20. Douglas Skinner, 2008. "Accounting for intangibles – a critical review of policy recommendations," Accounting and Business Research, Taylor & Francis Journals, vol. 38(3), pages 191-204.
    21. Omiros Georgiou, 2018. "The Worth of Fair Value Accounting: Dissonance between Users and Standard Setters," Contemporary Accounting Research, John Wiley & Sons, vol. 35(3), pages 1297-1331, September.
    22. Tunaru Radu S & Viney Howard P, 2010. "Valuations of Soccer Players from Statistical Performance Data," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 6(2), pages 1-23, April.
    23. Vera Palea & Renato Maino, 2013. "Private Equity Fair Value Measurement: A Critical Perspective on IFRS 13," Australian Accounting Review, CPA Australia, vol. 23(3), pages 264-278, September.
    24. Stephen Haswell & Elaine Evans, 2018. "Enron, fair value accounting, and financial crises: a concise history," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 31(1), pages 25-50, January.
    25. Sylvain Durocher & Yves Gendron, 2014. "Epistemic commitment and cognitive disunity toward fair-value accounting," Accounting and Business Research, Taylor & Francis Journals, vol. 44(6), pages 630-655, December.
    26. Zhang, Ying & Andrew, Jane, 2014. "Financialisation and the Conceptual Framework," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 17-26.
    27. Kees Camfferman & Stephen Zeff, 2003. "'The apotheosis of holding company accounting': Unilever's financial reporting innovations from the 1920s to the 1940s," Accounting History Review, Taylor & Francis Journals, vol. 13(2), pages 171-206.
    28. Murphy, Tim & O’Connell, Vincent & Ó hÓgartaigh, Ciarán, 2013. "Discourses surrounding the evolution of the IASB/FASB Conceptual Framework: What they reveal about the “living law” of accounting," Accounting, Organizations and Society, Elsevier, vol. 38(1), pages 72-91.
    29. Luminita Enache & Anup Srivastava, 2018. "Should Intangible Investments Be Reported Separately or Commingled with Operating Expenses? New Evidence," Management Science, INFORMS, vol. 64(7), pages 3446-3468, July.
    30. Carl Brousseau & Michel Gendron & Philippe Bélanger & Jonathan Coupland & Gary Monroe, 2014. "Does fair value accounting contribute to market price volatility? An experimental approach," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 54(4), pages 1033-1061, December.
    31. Jayne Godfrey & Ping-Sheng Koh, 2001. "The Relevance to Firm Valuation of Capitalising Intangible Assets in Total and by Category," Australian Accounting Review, CPA Australia, vol. 11(24), pages 39-48, July.
    32. Yuxiang Zhong & Wanli Li, 2017. "Accounting Conservatism: A Literature Review," Australian Accounting Review, CPA Australia, vol. 27(2), pages 195-213, June.
    33. Edmund Jenkins & Wayne Upton, 2001. "Internally Generated Intangible Assets: Framing the Discussion," Australian Accounting Review, CPA Australia, vol. 11(24), pages 4-11, July.
    34. Yuying Xie, 2015. "Confusion over Accounting Conservatism: A Critical Review," Australian Accounting Review, CPA Australia, vol. 25(2), pages 204-216, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yasmine Chahed, 2021. "Words and Numbers: Financialization and Accounting Standard‐Setting in the United Kingdom," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 302-337, March.
    2. Lantto, Anna-Maija, 2022. "Obtaining entity-specific information and dealing with uncertainty: Financial accountants' response to their changing work of financial reporting and the role of boundary objects," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 85(C).
    3. Lin Liao & Helen Kang & Richard D. Morris, 2021. "The value relevance of fair value and historical cost measurements during the financial crisis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 2069-2107, April.
    4. Lorena Mitrione & George Tanewski & Jacqueline Birt, 2014. "The relevance to firm valuation of research and development expenditure in the Australian health-care industry," Australian Journal of Management, Australian School of Business, vol. 39(3), pages 425-452, August.
    5. Stenka, Renata, 2022. "Beyond intentionality in accounting regulation: Habitual strategizing by the IASB," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 88(C).
    6. Tatiana Garanina & Henri Hussinki & Johannes Dumay, 2021. "Accounting for intangibles and intellectual capital: a literature review from 2000 to 2020," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5111-5140, December.
    7. Erb, Carsten & Pelger, Christoph, 2015. "“Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 13-40.
    8. Shawn Ho & Baljit K. Sidhu & Fan Yang, 2023. "The response of Australian firms to AASB 138 disallowing the recognition of internally generated identifiable intangibles," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3609-3641, September.
    9. Dargenidou, Christina & Jackson, Richard H.G. & Tsalavoutas, Ioannis & Tsoligkas, Fanis, 2021. "Capitalisation of R&D and the informativeness of stock prices: Pre- and post-IFRS evidence," The British Accounting Review, Elsevier, vol. 53(4).
    10. Pucci, Richard & Skærbæk, Peter, 2020. "The co-performation of financial economics in accounting standard-setting: A study of the translation of the expected credit loss model in IFRS 9," Accounting, Organizations and Society, Elsevier, vol. 81(C).
    11. Maroun, Warren & van Zijl, Wayne, 2016. "Isomorphism and resistance in implementing IFRS 10 and IFRS 12," The British Accounting Review, Elsevier, vol. 48(2), pages 220-239.
    12. Morley Julia, 2022. "The Pluralistic Foundations of Conceptual Veiling," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 12(2), pages 191-210, May.
    13. van Zijl, Wayne & Maroun, Warren, 2017. "Discipline and punish: Exploring the application of IFRS 10 and IFRS 12," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 44(C), pages 42-58.
    14. Hayoun, Shaul, 2019. "How fair value is both market-based and entity-specific: The irreducibility of value constellations to market prices," Accounting, Organizations and Society, Elsevier, vol. 73(C), pages 68-82.
    15. Stewart Jones & Nurul Alam, 2019. "A machine learning analysis of citation impact among selected Pacific Basin journals," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(4), pages 2509-2552, December.
    16. Jeremiah Green & Henock Louis & Jalal Sani, 2022. "Intangible Investments, Scaling, and the Trend in the Accrual–Cash Flow Association," Journal of Accounting Research, Wiley Blackwell, vol. 60(4), pages 1551-1582, September.
    17. Tami Dinh Thi & Wolfgang Schultze, 2011. "Capitalizing research & development and ‘other information’: the incremental information content of accruals versus cash flows," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(3), pages 241-278, November.
    18. Carole Botton & Julien Fouquau, 2012. "Adjugé, Vendu...Assuré," Post-Print hal-00937902, HAL.
    19. Tiago Cardao-Pito & João Silva Ferreira, 2018. "‘Fair Value’ accounting as the normative Fisherian phase of accounting," Accounting History Review, Taylor & Francis Journals, vol. 28(3), pages 149-179, September.
    20. Dahmash, Firas N. & Durand, Robert B. & Watson, John, 2009. "The value relevance and reliability of reported goodwill and identifiable intangible assets," The British Accounting Review, Elsevier, vol. 41(2), pages 120-137.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausact:v:32:y:2022:i:3:p:334-351. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1035-6908 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.