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 and investment properties
The profit (or loss) on the disposal of a tangible asset or investment property 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 and investment properties 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) and assets linked to non-football activities related to the club, 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 release costs for other personnel
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 release costs for other personnel are excluded from the calculation of football earnings for a reporting period. However, if an 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 release costs for other personnel must be included in the calculation of football earnings for a reporting period.
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Profit/loss on disposal of investments or subsidiaries
The profit (or loss) on the disposal of investments or subsidiaries must be excluded from the calculation of football earnings. The same applies to the disposal of financial instruments which represent an indirect disposal of assets, rights or activities of the club.
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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.
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Income/expenses directly attributable to non-football activities not related to the club
Income and expenses from non-football activities not related to the club must be excluded from the calculation of football earnings.
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Credit in respect of a reduction of liabilities arising from procedures providing protection from creditors
Any credit in respect of a reduction of liabilities arising from procedures providing protection from creditors must be excluded from the calculation of football earnings.
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Financial disciplinary measure imposed by the CFCB or national football association/league
For the calculation of football earnings, an appropriate downward adjustment may be made in respect of any financial disciplinary measure set out in a settlement agreement or decision imposed by the CFCB. The same treatment applies to any financial penalty imposed by a national football association/league in respect of national financial monitoring regulations.