G.4 Accounting requirements for the temporary transfer of a player’s registration - Club Licensing

G.4.1

The minimum accounting requirements for licence applicants that have transactions in respect of the temporary transfer of a player’s registration (loan) are as follows:

G.4.2

Loan fees received/paid must be reported as player transfer income/expense.

G.4.3

Loan of a player from the lender club to the new club with no obligation/option to buy:

1. The loan fees received/receivable by the lender club, if any, must be recognised as income over the period of the loan arrangement. The lender club will continue to recognise the original costs of a player’s registration as an intangible asset on its balance sheet and to systematically allocate the cost of the asset as an amortisation expense over the period of the player’s contract.

2. The loan fees paid/payable by the new club, if any, must be recognised as an expense over the period of the loan arrangement. If the player’s salary is taken over by the new club, it must be recognised as an employee benefit expense over the player’s loan term.

G.4.4

Loan of a player from the lender club to the new club with an unconditional obligation to buy:

1. The loan must be reflected by the lender club as a permanent transfer and the player’s registration rights must be derecognised from its intangible assets. The proceeds from the loan and from the future permanent transfer must be recognised from the inception of the loan agreement.

2. The directly attributable costs of the loan and the future permanent transfer for the new club must be recognised by the new club in accordance with the accounting requirements for permanent acquisition of a player’s registration.

G.4.5

Loan of a player from the lender club to the new club with an option to buy:

1. The transaction must be recorded as a loan by the lender club until the option is exercised by the new club. When the option is exercised, any remaining proceeds of the loan and proceeds of the future permanent transfer must be recognised in accordance with the accounting requirements for the permanent disposal of a player’s registration.

2. When the option is exercised by the new club, any remaining costs of the loan and the costs of the future permanent transfer must be recognised by the new club in accordance with the accounting requirements for the permanent acquisition of a player’s registration.

G.4.6

Loan of a player from the lender club to the new club with a conditional obligation to buy:

1. If a condition is considered to be virtually certain, then the player’s registration must be recognised by both clubs as a permanent transfer from the inception of the loan agreement.

2. If the fulfilment of a condition cannot be assessed with sufficient certainty to trigger the permanent transfer from the inception of the loan, then the player’s registration must be recognised first as a loan and then as a permanent transfer once the condition is met.

G.4.7

The licence applicant must apply the following adjustments in respect of the temporary transfer of a player’s registration between clubs that are related parties:

1. The club that has temporarily transferred in the player’s registration must calculate an expense amount in respect of the player for the reporting period using the greater of the following amounts:

   1. The actual transaction cost in the reporting period;

   2. The aggregate amount of the amortisation charge in respect of the player’s registration and the employee benefit expenses in respect of the player for the period of the loan as recorded in the financial statements of the club that has temporarily transferred out the player.

      If the calculated expense is greater than the recorded expense, then an appropriate adjustment must be made so that the difference is recognised in the restated financial statements.

2. The club that has temporarily transferred out the player’s registration must calculate an income amount in respect of the player for the reporting period using the lower of the following amounts:

   1. The actual transaction income in the reporting period;

   2. The aggregate amount of the amortisation charge in respect of the player’s registration and the employee benefit expenses in respect of the player for the period of the loan as recorded in the financial statements of the club that has temporarily transferred out the player.

      If the calculated income amount is lower than the recorded income, then an appropriate adjustment must be made so that the difference is recognised in the restated financial statements.