Should Players be Regarded as Assets on the Balance Sheet

Question: Memorandum: Should players be regarded as assets on the balance sheet. Answer: Asset Definition and Recognition Criteria The issue of whether players should be regarded on the balance sheet is quite a significant matter for the club. By definition the term asset tends to be a resource that is controlled by the existing entity this is because of the past events from which the future economic benefits will be expected to the flow of the entity. Hence, recognizing players as an asset means that there will be control by the entity thus allowing ease recognition of the financial statements i.e the balance sheet. Hence, recognition of the player would develop a sense that enables the club to determine whether they are benefiting. The recognition of the players also means that the club will be able to measure the objectivity of the players or the dedication a player has to the club. Future Economic Benefits Consider the case of the club winning for three consecutive years, this means that identifying the players as assets comes about with an essential character known as future economic benefits. Therefore, they will be able to analyze their contracts and other agreements with the player, hence enabling the club in determining whether the set out obligations are conditional or unconditional. Hence, there will be ease assessment of the players that keeps them performing well because of the set out obligations. Control Uncertainties arise from situations that fail to have evidence or there are unclear facts. Therefore, the recognition criteria of players as assets would enable the club boards to monitor any uncertainty issue that may be brought by a player. Hence, their recognition in the balance sheet means that Mr. Mind will be able to make a neutral judgment because; he effectively understands facts and circumstances that will be concluded in the final reporting period. Hence, there will be effective decision making because of the comparable manner of the club standard level. Past Events The club has a strong support base and is known for its ability to retain the trophy for three years. This means that the club is still relevant, but by making players part of the asset in the balance sheet makes the club officials monitor the interaction of their players. Therefore, management and players can reconsider the phase of conceptual framework in the future success of the club. Probable Occurrence The probable occurrence of players being recorded in the balance sheet as assets will provide or benefit the club through effective development of guidance on how revenues should be recognized among the players. The club will also be able to adopt proper accounting model which may be significant. Reliable Measurements For an asset to qualify the recognition criteria must possess the necessary cost. Therefore reliability of the players as assets means that the club can have the qualitative characteristics of the players in terms of financial information. There will also be an effective accounting model.