Article 89 Relevant contributions and relevant equity - Club Licensing

89.01

Relevant contributions received by the licensee comprise:

1. Contributions from an equity participant, being amounts received in respect of equity instruments, net of any repayment to equity participants, which are amounts paid and/or payable to an equity participant other than distributions (i.e. dividends);

2. Monies received from any party (not limited to related parties) as a donation (e.g. an unconditional gift) or a waiver of liability, which increases the entity’s equity without any obligation for repayment or to do anything in consideration for receiving the donation or waiver; and

3. Income transactions from any party (not limited to related parties) received in excess of fair value, the excess being equivalent to the difference between the amount recorded in the net result for the reporting period and the fair value.

89.02

Relevant equity held by the licensee comprises:

1. issued capital or share capital;

2. share premium and additional paid-in capital;

3. statutory and legal reserves; and

4. retained earnings.

89.03

For the avoidance of doubt, the following types of transaction are not relevant contributions or relevant equity:

1. Positive movement in equity arising from a revaluation of assets or other gains/losses not recognised in the profit and loss account;

2. Creation, or increase in the balance, of other reserves where there is no contribution from equity participants;

3. A transaction as a result of which the reporting entity has a liability or a contingent liability, in that the reporting entity has an obligation to act in a certain way;

4. Amounts received in respect of instruments classified as liabilities; and

5. Amounts receivable in respect of elements described in Paragraph 89.01 and Paragraph 89.02.

89.04

The burden is on the licensee to demonstrate that the substance of the relevant contribution or relevant equity has been completed in all respects and without any condition attached. The cash or cash equivalents must have been received by the reporting entity net of repayment in respect of monies received. An intention or commitment from owners to make a contribution is not sufficient for such a contribution to be taken into consideration.

89.05

Only relevant contributions or relevant equity, whichever of the two amounts is highest, can be considered to increase the acceptable deviation and cover relevant deductions in accordance with Paragraph 88.02, Paragraph 88.03 and Paragraph 90.02.