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2017 Financial Result

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MatthewBoydFanClub 



Joined: 12 Feb 2007
Location: Elwood

PostPosted: Mon Nov 27, 2017 8:57 am
Post subject: Reply with quote

K wrote:
MJ23 wrote:
...

"As the club has previously advised supporters, each year Collingwood will continue to depreciate the value of the Glasshouse and redevelopments of the Holden Centre."


Can someone explain to me what this actually means? Money and I are obviously strangers.

It's like when you buy a block of land and build a house on it. The house costs a lot to build and the payments to the builder represents what it cost to build the house. Over time the value of your block of land goes up due to inflation while the value of the structure of your house goes down due to wear and tear of the property. So if you were to view your house as an investment which earns money, the money you spend each year to maintain the standard of the property is claimable on tax (that is, if your house was earning money as an investment), while the reduced value of the structure of the property (let's say 2-4% Per year) can be subtracted from the earnings you make. That depreciated value you put on the value of your house each year can be a lot higher than your earnings per year from the house. So while you have good cash flow from the house if you're renting it out, the figures show you are in fact losing money on the house. It's the cash flow that's the most important thing which determines whether you go broke or not.
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stui magpie Gemini

Prepare for the worst, hope for the best.


Joined: 03 May 2005
Location: In flagrante delicto

PostPosted: Mon Nov 27, 2017 7:45 pm
Post subject: Reply with quote

Dark Beanie wrote:
stui magpie wrote:
As a Not for Profit organisation, do we have to pay tax on any "profit"?


Depends if the club has an income tax exemption from the ATO.
Organisations may call themselves not-for-profit but are not necessarily considered NFPs by the ATO.


Ta for that.

Where I was heading, not being a CPA, is I suppose it's better to write off depreciation on an asset on the books than pay tax on the revenue.

We can't spend overs on the footy team or coaches salaries as the AFL tax that, so as long as we cover expenses and have cash reserves along with some tangible assets, we're in good financial shape.

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Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down.
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piedys Taurus

Heeeeeeere's Dyso!!!


Joined: 04 Sep 2003
Location: Resident Forum Psychopath since 2003

PostPosted: Tue Nov 28, 2017 7:45 pm
Post subject: Reply with quote

Dark Beanie wrote:
CPAs, doctors, coaches.... we're an eclectic bunch Very Happy


AND psychologists! Laughing

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K 



Joined: 09 Sep 2011


PostPosted: Tue Nov 28, 2017 8:09 pm
Post subject: Reply with quote

BucksIsFutureCoach wrote:
K wrote:
MJ23 wrote:
...

"As the club has previously advised supporters, each year Collingwood will continue to depreciate the value of the Glasshouse and redevelopments of the Holden Centre."


Can someone explain to me what this actually means? Money and I are obviously strangers.

It's like when you buy a block of land and build a house on it. The house costs a lot to build and the payments to the builder represents what it cost to build the house. Over time the value of your block of land goes up due to inflation while the value of the structure of your house goes down due to wear and tear of the property. So if you were to view your house as an investment which earns money, the money you spend each year to maintain the standard of the property is claimable on tax (that is, if your house was earning money as an investment), while the reduced value of the structure of the property (let's say 2-4% Per year) can be subtracted from the earnings you make. That depreciated value you put on the value of your house each year can be a lot higher than your earnings per year from the house. So while you have good cash flow from the house if you're renting it out, the figures show you are in fact losing money on the house. It's the cash flow that's the most important thing which determines whether you go broke or not.


Thanks, BIFC.

...

By the way, Nicksters, at first glance it looks like the Cats had vaguely similar results with pretty similar words and reasons being bandied about:
http://www.afl.com.au/news/2017-11-27/cats-left-the-red-despite-onfield-success

Is that a fair assessment?
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Lone Ranger 



Joined: 02 Apr 2003
Location: Macedon Ranges

PostPosted: Wed Nov 29, 2017 3:43 pm
Post subject: Reply with quote

Depreciation is a real expense ... you are just catering for it in the books now rather than later.

If you have a $100,000 asset and sell it in three years for $70,000 you have made a loss.
Instead of incurring that loss in 3 years, you depreciate each year (say $10,00 per year). That way you spread the loss over multiple years.

Its still a real loss though.
If you depreciate too far, you then incur a profit when you sell. So if instead you depreciated down to $50,00 and then sold for $70 in year 3, you have now recorded a $20K profit you have to pay tax on.

So depreciation isnt funny money ... its real.
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