Financial Report Essay Example | Topics and Well Written Essays - 1500 words

Financial Report - Essay Example Arsenal is a renowned football club and it has received widespread popularity among the football supporters. In the recent decades, football clubs have gained enormous publicity because of the commercialization of the sports. According to Morrow (1996), football clubs are generally involved in three major activities. Firstly, they involve themselves in commercializing by selling tickets and receiving broadcasting fees from media. Secondly, they involve themselves in active trading and disposal of players. Finally, they develop in-house talent through mentoring and training from the beginning. Arsenal is listed as a commercial organization which derives its revenues from football fixtures, broadcasting and real estate development. In fiscal year 2010, football accounted for 59% of the revenues while real estate development proportion accounted for 41% of the revenues. The Arsenal group reported a profit before tax figure of ?55.96 million in 2010 which was very impressive for the shar eholders (Arsenal Holdings Plc, 2010). The organization is committed to a long term strategic plan by carefully investing in talented players and developing them. At the heart of Arsenal lies its Emirates stadium where it aims to continue investing so that it stays best-in-class and has a clear identity as Arsenal’s home. ... However, they do not include any current value for their players or any value at all for ‘home grown’ players. Although it may sound ridiculous to include human as assets but they can be accounted as intangible assets if they fulfill the definitions put forth by financial reporting frameworks. A salaried person is generally expensed in the income statement whereas professional sports players are treated in a different manner in the accounting statements. Wagner (2007) in his publication mentioned that human resources are one of the most critical factors which investors look for while evaluating a company. Thus, we can metaphorically consider every human as vital for the organization and he may be regarded as an asset for the organization but it is not done practically since it differs from the definition formulated by the financial reporting frameworks. We will be analyzing and interpreting this aspect from International Financial Reporting Standards. As per the definiti on of an asset, it is anything that can be controlled by an organization or entity and it expects future benefits will be flowing to the organization from that asset. An asset is controlled if the organization is entitled to certain rights over that asset particularly restricting others from utilizing that asset for their own advantage. The definition of asset is applied in the case of Arsenal as it holds right over its players for a certain period due to the legal agreement arranged between the player and the club. The players are supposed to provide their services to the club according to the terms of contract. Arsenal expects that future benefits will flow from these players as they will be playing for Arsenal, and Arsenal will be deriving its revenues through fixtures and