The following items are not included in the calculation of football earnings:
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Profit/loss on disposal and depreciation/impairment of tangible assets
The profit (or loss) on the disposal of a tangible asset is calculated as the sale proceeds (less costs incurred to sell) less the asset’s net book value (as per the balance sheet) at the date of sale.
The profit/loss on disposal and depreciation/impairment of tangible assets in a reporting period is excluded from the calculation of football earnings because the aim is to encourage investment in and expenditure on facilities and activities for the long-term benefit of the club.
For the avoidance of doubt, any depreciation charge in respect of right-of-use assets (for operating leases) must be included in the calculation of football earnings.
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Profit/loss on disposal and amortisation/impairment of intangible assets other than player registrations and other personnel’s release costs
An intangible asset is an identifiable non-monetary asset without physical substance (e.g. goodwill arising on a business combination). An asset is a resource that is controlled by the entity as a result of past events (for example, purchase or self-creation) and from which future economic benefits are expected (inflows of cash or other assets or reduced future costs).
Profit (or loss) on the disposal of an intangible asset is calculated as the sale proceeds (less costs incurred to sell) less the asset’s net book value (as per the balance sheet) at the date of sale.
Amortisation is the systematic allocation of the depreciable amount of an asset over its useful life, i.e. the period over which an asset is expected to be available for use by an entity. An impairment loss is the amount by which the carrying amount of an asset exceeds its fair value less costs to sell.
The profit/loss on disposal and amortisation/impairment loss of intangible assets other than in respect of player registrations and for other personnel’s release costs is excluded from the calculation of football earnings for a reporting period. However, if the intangible asset generates or generated relevant income, then the related amortisation/impairment must also be recognised as a relevant expense.
For the avoidance of doubt, the loss on disposal and amortisation/impairment of player registrations and for other personnel’s release costs must be included in the calculation of football earnings for a reporting period.
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Tax income/expense
Tax expense in respect of income tax includes all domestic and foreign taxes that are based on taxable profit. Taxable profit (tax loss) is the profit (loss) for a reporting period upon which income taxes are payable (recoverable). Tax expense is the amount recognised for a reporting period in respect of the current and future tax consequences of transactions and other events.
Tax expense does not include value added taxes or tax and social security contributions in respect of employees.
The tax amount – whether it is a credit or a debit in the profit and loss account – is excluded from the calculation of football earnings.