not so - Deano is correct, 99% certain it will be stated at cost.

building an asset for say £4m but then perceiving it to be worth £8m as it would produce £8m of future revenue flows is not one you would get past the auditors.
Stick to commenting on things you know about

just wondering why no bids have been made for bulls players.Is it because smart chairmen are waiting for players to get sacked then make a move.

rl

Well you've made that up didn't you.

It is obviously an "asset" (general use of the word as you would expect on a rugby league forum rather than an accountancy course) as it means Saints (and Warrington) do not have to pay rent for use of a stadium in which to carry out its primary purpose (eg play rugby).

The worth given to that asset that I'd used to illustrate it has a value was again an easy to understand example rather than an accountancy principle eg for the life of the stadium Saints do not have to pay any rent. If you are suggesting that has no value then I give up.

At least you're amusing the usual culprits on here. You stick to wikipedia as your business resource.

*Comes into a thread looking for talk on Bradford, finds a legal arguement taking places, promptly leaves*.

Not to back-seat moderate, but ...

Yes, it would be normally (though if dilapidated it could be a liability rather than an asset, a ground like Odsal would potentially be problematic), though the value is probably quite low.

The book value as shown in the accounts could appear high, this is however just an accounting entry rather than showing the market value of the stadium. I imagine the HJ cost around £15m-20m to build and that that figure would have been entered in the balance sheet in the financial year in which the development completed. Depreciation charges would then be applied each financial year, these write downs (of say 5% a year) resulting in the current £12m figure you refer to, that would seem to make sense, though I haven't seen the accounts, perhaps if you have you could confirm?

The market value of somewhere like the HJ or LP is however likely to be low, unless the ground had redevelopment potential for residential or retail (but then the club would need to find somewhere else to play). Without redevelopment potential you would be looking at the rent you could achieve, the covenant strength of the tenant and any costs you were unable to pass on to the club as tenant to determine what the property was worth as an investment.

In terms of what the ground is "worth" to the club it may save some money compared with renting (unlike many Wigan fans I don't think we get a good deal at the DW which is why IL has never revealed the true position) and does offer opportunities to generate revenue through conferences etc there is something to be said for having a lease without repairing liability from a landlord with deep pockets who can meet the maintenance and repair expenses, which will only increase as any stadium ages. The day will come when the HJ and LP need a major overhaul and this may be as expensive as building a new stadium from scratch. Wire's owner may be able to fund this but I'm not sure many clubs would be in as fortunate a position. Many modern buildings only have a useful life of 30 years or so and while some of the modern stadiums in RL areas look to have been solidly built (Huddersfield and the DW spring to mind) and look like they could last for decades to come without needing vast sums spending on them, other grounds look less robust (LP in particular).

No, I didn't make it up. You referred to the value of the asset being derived from its rental income. Who apart from a property investor would be interested in owning a property in order to receive rental income.

As for your "general" use of the word "asset", here's what you actually said

You refer to "net present value" (a technical accounting term) based on a rental calculation. You then go on to refer to the auditors having valued the stadium at c £12m (I think you mean that they have audited the accounts which contain an entry on the balance sheet of c£12m rather than valuing it, as this would be something for a surveyor or valuer rather than an auditor).



D'oh! I'm tempted to resort to the Picard double-facepalm again...

The reason they would report the value in a different way is simple - because they are required to under UK accounting standards (GAAP).

I don't use Wikipedia as a business resource myself but it's fair to say that the contributors to the two Wikipedia entries mentioned above seem to have a much firmer grasp of the issues than you do.

sorry* 1.9482421875:5