A licensee must satisfy the following financial conditions to be entitled to an increase in the level of acceptable deviation for a reporting period
Condition 1: Positive equity
At the end of the reporting period, the licensee reports positive equity.
Condition 2: Quick ratio
At the end of the reporting period, the licensee reports a quick ratio equal to or above 1.
The quick ratio is calculated as total current assets less inventories divided by total current liabilities.
Total current assets = Sum of current items (i) to (vii) of
Inventories = item (vi) of
Total current liabilities = Sum of current items (xii) to (xxii) of
Condition 3: Sustainable debt ratio
At the end of the reporting period,
- the licensee’s net debt (less the amount that is directly attributable to the construction and/or substantial modification of a stadium and/or training facilities)
is less than three times
- the average (which must be positive) of relevant earnings for the reporting period in question and the one immediately preceding it.
For the purpose of condition 3, relevant earnings are calculated as the sum of:
the total revenue (as calculated for football earnings); and
total net result from player transfers; less
total operating expenses (as calculated for football earnings).
Condition 4: Going concern
The auditor’s report in respect of the annual financial statements for the reporting period does not contain, regarding the going concern, an emphasis of matter, a key audit matter or a qualified opinion/conclusion.