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tewas t1_ixl14ey wrote

Reply to comment by Cgb09146 in Manchester United may be up for sale, so is the team profitable? [OC] by NicuCalcea

There is 165M depreciation. Thats a paper expense, great for taxes, but no real money leaving hands. Im sure they structured depreciation of prior capital investments over period of time to maximize tax subsidies

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scrchngwsl t1_ixl4gwe wrote

That's how they account for player purchases (and sales) - it's amortised over the length of the contract.

The player purchases are often themselves paid in instalments, the structure of which differs from how it's amortised, but it's not typically all paid in one lump sum either.

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Tsupernami t1_ixle9bw wrote

You cannot claim depreciation in the UK for tax purposes. You have to use capital allowances

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wellknownname t1_ixleboh wrote

On the contrary, for tax purposes you would prefer to expense the whole thing immediately rather than have to amortise over several years. Actually I suspect that is what happened for tax purposes - the UK is unusual in that tax treatment of assets does not follow the accounting treatment but uses a system of 'capital allowances' instead, and the HMRC manuals do not seem to suggest there are capital allowances on football players.

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Diligent-Road-6171 t1_ixnarpm wrote

>There is 165M depreciation. Thats a paper expense, great for taxes, but no real money leaving hands.

Depreciation and amortization are real expenses that cost real assets to make up for them.

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