The licence applicant must report in its annual financial statements or interim financial statements (whichever close as at the 31 December preceding the deadline for submission of the application to the licensor and preceding the deadline for submission of the list of licensing decisions to UEFA) a net equity position which:
is positive; or
has improved by 10% or more since the previous 31 December.
Net equity means the residual interest in the assets of the entity after deducting all its liabilities as set out in its annual financial statements or interim financial statements as applicable. If a licence applicant’s assets exceed its liabilities, then the licence applicant has a net asset position, i.e. positive equity. If a licence applicant’s liabilities exceed its assets, then the licence applicant has a net liability position, i.e. negative equity.
If a licence applicant does not comply with paragraph 1 above as at 31 December, the licence applicant can submit a new audited balance sheet by 31 March at the latest in order to demonstrate that one of the conditions in(a) or (b) has since been fulfilled.
For the purpose of compliance with this criterion, equity can include subordinated loans that are, for at least the following 12 months, subordinated to all other liabilities and non-interest-bearing.
The licensor’s assessment must be in accordance with.
Exceptionally, a licence applicant can request an alternative assessment date if:
it has an annual accounting reference date of 31 May, in which case it may prepare interim financial statements for a six-month period ending 30 November and use such interim financial statements for the purposes of the net equity rule; or
it has an annual accounting reference date of 30 November, in which case its annual financial statements for the reporting period ending 30 November may be used for the purposes of the net equity rule.
In such exceptional cases a) or b), all references to 31 December in the net equity rule should be understood as 30 November.